This paper discusses the neighbourhood asset management for community's sustainability in the cities of Surakarta and Yogyakarta, in Central Java, Indonesia. The combination of urban heritage and traditional industry is a potential issue in sustaining urban heritage. First, we identified three selected sites in the areas of Laweyan, Kauman and Tamansari as the Batik cluster industries in urban heritage areas. Second, the historical development process of the Batik industry was clarified and stressed during the revitalization phase (1998.Present) using timeline analysis. Third, in order to clarify how the Batik industrial cluster function in the community, studies of current conditions by comparison of each cluster's neighborhood asset management have been conducted. Three factors have been analyzed human capital, development market, and social capital. Subsequently, trough the development phases of Batik Industry, there were several factors that caused changes to the Batik handmade production such as technologies, policy and changing life style. The functioning neighborhood asset management in all three sites is as traditional home base-production. Furthermore, the issues facing all three of the sites in this study are the performance of the forum as a knowledge-sharing agent, and as a platform for organizing the Batik industry and managing tourism within urban heritage sites. Based on these findings, the conservation of the cultural identity of the production process and local identity of settlements are vital elements of Batik marketing within urban heritage.