Abstract: With the rapid advancement of artificial intelligence, small town townscape design presents a prime opportunity to explore novel methodologies and innovative application pathways. Grounded in the Human-AI collaboration (HAI) concept, this study develops a tailored technical approach by constructing a townscape knowledge system, fine-tuning generative models, and establishing an HAI interaction-driven design workflow. The efficacy and value of this method-specifically in enhancing design efficiency, facilitating creative generation, and reinforcing townscape characteristics-are validated through practical case studies. This research contributes to the theoretical framework of small town townscape design and deepens the understanding of AI applications in small town planning and construction.