Urban regeneration has emerged as a multifaceted strategy to address the challenges of physical decay, socio-economic diversity, and institutional fragmentation in fast-growing urban areas. The main goal of this study was to monitor and explore the current situation of urban regeneration in Urmia, Iran, as well as to propose a localized optimized model for sustainable regeneration of decayed urban fabrics. Employing a descriptive-analytical approach with a survey-based method, data were collected through a researcher-designed questionnaire from 354 residents of inefficient neighborhoods, selected via purposive sampling. The instrument's validity was confirmed by experts, and its reliability was measured using Cronbach's alpha (α=0.85). The analysis of the data utilized inferential statistics, including one-sample t-tests and regression. Results reveal quite favorable managerial, social, and economic dimensions, and were not previously found in relation to physical and environmental conditions. It was apparent that participatory governance, institutional coordination, and supportive infrastructure were key contributors to successful regeneration processes. Findings also highlight important factors that influence successful regeneration, namely participatory governance, institutional coordination, and facilitative infrastructure. Based on a seven-dimensional conceptual framework, this study introduces a context-sensitive model that integrates socio-cultural, economic, physical, environmental, and managerial components, offering both a theoretical foundation and practical roadmap for future urban regeneration projects in Iran and similar urban contexts.