Cities all over the world are currently facing many challenges and obstacles related to economy, society, and environment. These were the results of rapid economic developments, urban and population growth, and the accompanying increased needs and changing lifestyles. Several decades ago, Manama, the capital of the Kingdom of Bahrain, experienced significant changes in its urban form due to economic, cultural, and environmental factors. These changes appeared specifically after the discovery of oil in 1932, and the transformation of the economy from fishing and pearl trading to one based on oil. Currently, the Kingdom of Bahrain is investing in its capacity and solutions to these challenges, including creating major attractive developments to meet human needs and nourish the economy. Traditional urban neighborhoods across Bahrain, such as Kanoo, a traditional neighborhood located in Old Manama, were severely affected by modern developments. This research study investigates the urban design study of the Kanoo neighborhood, its features, the urban and historical significance in Manama and its surroundings. The study further investigates the role of rehabilitation projects in regenerating the old core of Manama, while rebuilding the vanishing identity of the city. The findings highlight the critical factors effecting the Kanoo neighborhood and contribute to develop strategies for a sustainable urban regeneration approach, enabling to protect the urban fabric of the neighborhood and its remaining historical areas, to revive the old city and preserve the neighborhood’s identity.