Historic buildings in urban areas are valuable heritage and would require effective design for renovation to upgrade these buildings while preserving their heritage characteristics. This current study evaluated renovation requirements: loss of natural and spatial characteristics, single function and lack of building facade design, of a courtyard building in a Beijing historical district. Limitations of the ‘multiple coexistence’ design concept were analysed to fully achieve integration of historical, cultural, social, educational, commercial and economic values while preserving their natural characteristics. Intelligent control strategy and equipment can reshape the spatial lay out and natural environment, to enhance the building function and social value. The design strategy of the skylight to be installed in the courtyard was evaluated by simulation in this study. CFD simulation results show that the air temperature in the courtyard can increase 20% by incorporating a skylight that can be automatically closed in winter. During the summer, the skylight would be open to largely reduce the average air temperature by 1.2°C. The visual impact of external equipment can be mitigated by adding decoration to the courtyard facade. The findings should inform future development of a new design concept, to provide design paradigms for the renewal and renovation of similar historic buildings.