Smart city applications, evolving from technological to socially inclusive, aim to prioritize sustainability and livability. Despite growing interest, a lack of standardized definitions and planning methodologies hinders smart city development. Urban living labs (ULLs), on the other hand, play a pivotal role in implementing smart city solutions, acting as testing grounds for technologies and policies. Their integration into local government practices is essential. However, ULLs in Turkiye, such as the Basaksehir Living Lab and Istanbul Planning Agency, focus on local problem-solving and sustainable development. While ULLs hold promise, it is unclear if they can entirely replace existing urban governance models. Research is needed to assess their effectiveness. Effective collaboration between national and local governments is essential for comprehensive urban planning. Addressing these challenges, the article emphasizes the interaction between ULL and local government by analyzing Istanbul's landscape transformation process and management system as a model for other countries.