This paper examines the present state of commercial use of historical buildings, details of business categories, and descriptions of items on sale in the shops in the old town of Lijiang, China in order to investigate the problems of cultural-tourism development centered on World Heritage sites. In recent years, the usage of historical buildings built by the Naxis, the indigenous ethnic group of Lijiang, has drastically changed. At present, over 60% of shops are tourist-oriented souvenir shops and restaurants. Furthermore, over 50% of the shopkeepers are temporary residents, with a large majority renting rooms from indigenous owners. These findings suggest that the location of the minority’s residence and its culture are rapidly changing as tourism develops. They also imply that a re-evaluation of policy is essential for the development of sustainable tourism.