The inscription of World Heritage Status to both George Town and Melaka in 2008 had given tremendous impacts in terms of tourist arrivals and the growth of economy. While the inscription has pinned Malaysia on the global tourism map, the rapid pace of tourism development has resulted in a series of problems brought by tourism commodification. Tourism gentrification, outmigration and change of building uses are among the common symptoms of commodification. Taking George Town as a case study, this paper aims to explore the implications of tourism commodification, particularly on the physical impacts and local residents. This study is essential to identify the stage of commodification of the study area, whose development are based on the heritage commodification. Based on the site observations and semi-structured interviews with the residents, administrative staffs and business owners in the study area, several arguments are put forward in this paper. First, a phased process of tourism commodification has taken place in George Town, and triggered significant changes in lifestyle, community development, property market values and land use development. Second, George Town has shifted from a free trading port to a productivist heritage-scape, with local government being the principal influencing factor. Findings of the study reveal that commodification does not necessarily destroy the meaning of heritage in urban heritage destination, but also helps to improve economic status and quality of life of the local residents. Future research on commodification should be conducted in other World Heritage Sites and compare with the commodification stage in George Town World Heritage Site.