Urban sacred landscapes are unique socio-ecological spaces where spiritual, cultural, and ecological values intersect, serving both as centers of community life and as critical ecological assets within the urban fabric. This study examines the revitalization of the Tali temple pond in Kozhikode, India, as a case of heritage-sensitive urban conservation that integrates traditional ecological knowledge (TEK), contemporary design interventions, and community participation. Using mixed methods, including stakeholder surveys, ecological observations, and spatial analysis, the study evaluates how the project balanced cultural continuity with ecological resilience. Findings indicate significant improvements in water quality, stormwater retention, and microclimate regulation, along with the re-establishment of submerged vegetation and benthic fauna. Stakeholder feedback highlighted strong acceptance of retained traditional elements and more nuanced responses to contemporary additions, underscoring the importance of participatory and adaptive design. By situating these outcomes within global discourses on socio-ecological systems and the Historic Urban Landscape (HUL) framework, the study demonstrates how small urban sacred water bodies can function as multifunctional blue–green infrastructure. The findings provide theoretical, methodological, and practical insights for heritage-sensitive urban revitalization, with broader implications for policy and practice in similar contexts worldwide.