Recent shifts in China’s urban village regeneration strategies have transitioned from comprehensive, large-scale redevelopment to nuanced, incremental micro-regenerations, incorporating artistic interventions as a dynamic mechanism for fostering urban governance innovation. This paper examines the transformative impact of social entrepreneurship based artistic intervention within the micro-regeneration of urban villages, particularly through a case study of Aohu Village in Shenzhen. It highlights how a local artist and villager catalyzed the village’s bottom-up regeneration by mobilizing his social networks to attract artists and organize art events, significantly boosting Aohu Art Village’s profile and contributing to social innovation. This approach not only drew attention from local government but also demonstrated the potent influence of artistic intervention on neighborhood regeneration and local governance. Unlike conventional, top-down planned art villages, Aohu retains its original community fabric through community-led regeneration while also addressing challenges such as rising rents and potential displacement of artists. The case study of Aohu Art Village illustrates the critical role of social entrepreneurship in urban village regeneration, emphasizing the necessity of a balanced understanding of artistic intervention, community engagement, and sustainable urban regeneration in China’s evolving urban landscape.