Iran, with its long history of urbanization, possesses a valuable collection of historic and ancient cities. Historic and old urban fabrics, as integral components of cultural and physical heritage, reflect the identity and social structure of urban communities. However, rapid urbanization and unbalanced development over recent decades have created physical, economic, and social challenges in these areas. This study aims to assess the condition of the deteriorated urban fabric of Reyhan Neighborhood in Maragheh and identify effective strategies for its regeneration. The research is applied in terms of purpose and descriptive–analytical in terms of methodology. Data were collected through documentary studies and questionnaires and analyzed using SPSS software. The SWOT model was employed to identify and formulate regeneration strategies, while a complementary quantitative analysis based on the weighted scores of internal and external factors was conducted to improve the accuracy of determining the strategic position. The findings indicate that low land and property prices, inadequate urban services, proximity to the market, and the growth of economic activities are the most important factors in the dimensions of strengths, weaknesses, opportunities, and threats, respectively. The quantitative analysis of the strategic position also revealed that Reyhan Neighborhood is in the WT position. Therefore, reducing internal weaknesses and controlling external threats should be among the main priorities for regenerating the area. In this regard, strengthening urban infrastructure, improving physical quality and accessibility networks, enhancing residents’ participation, supporting economic activities, and strategically utilizing the neighborhood’s historical and spatial potentials can contribute to sustainable regeneration and improve residents’ quality of life. The results emphasize the need for an integrated, gradual, and participatory approach to the regeneration process.