The research hotspot of lane neighborhood is currently focusing on the morphological protection and regeneration. Faced with such tendency, the thesis inversely believes multidimensional analyses of lane neighborhood’s identity characteristics and spatial forms under the perspective of etymology and urban development are an alternative way to the preservation of Shanghai historic precinct and the application of lane neighborhood for the world heritage. Through the summary of the development process of Chinese classical inhabitation system and western townhouse system, the thesis conducts introspection on the current research paradigm and accordingly raises the idea that lane neighborhood is a kind of living pattern which is formed during the process of Chinese traditional dwelling evolving from a single storyline to dichotomization. In conclusion, the thesis reveals revaluation of the emergence and development process of lane neighborhood will contribute to the authentication of the historic location and contemporary significance of lane neighborhood studies.