The current study aims to contextualise cohousing with a focus on analysing a traditional rural settlement in Iran. Azghad is a historical village located in Iran, which has been developed throughout centuries based on strong social and environmental systems. The research uses field studies in the form of observing the environment of Azghad village, initial and natural explanation of housing pattern and interviews with local people with a qualitative research approach and documentary studies examines the physical characteristics of this rural community. Through investigating the physical pattern of the village in the area under study, the elements of the social–physical system which form the residential type of the village were extracted. The comparison of the social and physical system of the residential fabric of the Azghad and its residential neighbourhoods showed that the residential pattern of Azghad could be introduced as an example of a collective housing model. The rural housing type is an example of a collective housing style that has been formed over time based on the shared values of residents and the activities they wanted to do collectively.