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With the recent boom in rural tourism, many Chinese historic villages are experiencing a rapid transformation process in which traditional residences are shifted to become mixed-use zones of residential and commercial functions. This rapid transformation process presents threats to local villagers' daily lives. Cave villages in the Loess Plateau of China have historically benefited from adaptability to social, historical, and natural conditions and have retained their living function for over a thousand years. However, in the present time, the increasing tourism needs caused contradiction on how to sustain the living needs in the transformation process. It follows that the cave villages are an appropriate case study by which to illustrate the transformation of historic villages in China. Based on a field survey that addressed the practical needs of residents in Baishe village, Shaanxi, this paper provides a practical typological approach to demonstrate how future interventions in traditional dwellings could be implemented through prototyping the formation and spatial structure evolution of cave-dwellings. This paper contributes to integrating historical values into modern residents' needs through spatial evolutionary analysis and provides an analytic perspective on the construction of people-oriented communities in China. [ABSTRACT FROM AUTHOR]