Townscape in urban heritage sites contributes a vital visual perception of the public realm. It consists of the streetscape, buildings, natural features, and human perception, which include the social, cultural, and way of life on the scenes. Historic Townscape represents tangible and intangible scenes related to historical artifacts and the historical value of the places. Townscape Character Assessment (TCA) can apply to evaluate the quality of urban elements which represent the significance of social, cultural, and human perception of urban heritage. However, Chiang Mai City Council should have paid more attention to the valued process of establishing a townscape character assessment policy and has not been part of the ongoing heritage preservation process. In the critical urban heritage environment of Chiang Mai Old City, the aim is to define the townscape characteristics of the city and to be used as fundamental knowledge to establish the suitable Townscape Character Assessment (TCA) for Chiang Mai Old City. This research study has considered four aspects in terms of townscape Character Assessment Policy study that could establish the Townscape Characteristics of Chiang Mai Old City. These are the quality of the streetscape; cultural expression; perceptual factors; and socio-cultural values. Generally, Townscape Character Assessment employs the four significant factors to value townscape characteristics. This study has considered the ongoing new world heritage site as Chiang Mai is a “living heritage” which has faced the loss of greenery, cleanliness, and identity in its inner city and is likely to have issues when the city becomes a heritage tourism destination. The study involved twenty-five local participants and used a mixed methodology consisting of questionnaires, photo-elicitation interviews (PEI), needle method, and in-depth interviews. The results found that the connection of religious places, urban heritage artifacts, cultural activities, and the natural colors of local flowers in the city represented its characteristics. The study revealed possible factors to evaluate a townscape character assessment policy for CMOC, including the physical need for streetscape improvement, cultural expression along the streetscapes, perception of the quality of the streetscapes, and representation of socio-cultural values of the streetscapes. These results can be implemented in developing assessment guidelines for any heritage sites undergoing heritage nomination or any historical cities concerned with townscape character.