ISVS e-journal, Vol. 11, Issue 12 December, 2024 Open Access Journal of the International Society for the Study of Vernacular Settlements [eISSN:2738-2222] From Historical Vernacular to Contemporary Settlements 49 Problems and Potentials of Promoting Vernacular Heritage to Regain Cultural Identity of Historic Cities: Insights from Bahrain Souheil El Masri 1 , Layla Karajica 2 & Ranjith Dayaratne 3 1 Gulf House Engineering, Bahrain; 2&3 University of Bahrain, Bahrain. email: layla_muhasilovic@uob.edu.bh Received Accepted Published 11.02.2024 27.12.2024 31.12.2024 https://doi.org/10.61275/ISVSej-2024-11-12-04 Abstract The rich vernacular architectural heritage of Bahrain has been subject to dilapidation as a result of rapid urbanization and its complex physical, social and economic dimensions. In fact, the two major cities of Muharraq and Manama have been undergoing profound changes facing serious challenges and problems threatening the fine organic traditional urban areas rich with vernacular settings. Large scale developments, high-rise buildings, shopping centers and infrastructure expansions, coupled with economic changes, have led to notable urban transformations. Undeniably, globalization has dominated all aspects of life with its clichés, challenges and potentials. In this situation, an important question is how could cultural identity be sustained in fast- transforming cities in Bahrain? This paper focuses on sustaining the cultural identity of Manama and Muharaq. It employs a qualitative research method: lived-in, participatory observations. It examines the physical aspects and discusses a wide range of issues and their interrelations including appropriate land-use systems and building regulations, financial resources and incentives, education and heritage, as well as urban and architectural practices. It thus proposes a holistic approach integrating between the various scenarios of restoration, functional rehabilitation, in-fill and new developments. stakeholders' involvement and institutional developments. The paper argues that the approach should filter between short-term solutions and far-sighted strategies, between private interests and public good, between market efficiency and social welfare, between bottom up approaches and top down ones, between physical development and heritage protection and between large scale and small-scale developments. It argues that, comprehensive policy measures must be taken focused on the possibilities of turning the ‘wicked’ challenges into ‘potential’ opportunities. Keywords: Vernacular Settings, Architectural Heritage, Urban Identity, Urban Transformations, Bahrain.