ABSTRACT The redevelopment of Chinese heritage districts increasingly adopts collaborative approaches, raising concerns about power dynamics in these processes and their potential impact on resolving conflicts of interest through collaboration. This study establishes a multi-dimensional framework, examining arenas and sources of power to uncover power mechanisms and their impact on collaborative governance in the redevelopment of Dashilar, Beijing, China. Through ethnographic research, we found that institutionalized collaborative decision-making empowers participants to have the final say on relocation and renovation decisions. However, biased mobilization and discursive practices, with different sources of power utilized, affect collaborative processes and outcomes. Over time, collaborative decision-making results in elite control of Dashilar’s historic fabric and its subsequent gentrification. The government consolidates its power by controlling economic resources and influencing land use decisions. Crucial conflicts remain obscured, weakening the interests of residents and market actors. To understand power in collaborative governance, analysis must encompass both sources and arenas of power, transcending observable interactions within formal institutions to include informal practices.