Culture is an important strategy and means of urban renewal, but it also faces risks and challenges of instrumentalization, symbolization, and consumerism. Local culture is rooted in local resources and has evolved over time. On the one hand, it can empower the high-quality development of urban renewal; on the other hand, urban renewal initiatives also create opportunities for the dynamic construction of local culture. This paper argues that local culture and urban renewal have the potential for mutual empowerment. Based on the analysis of the logical basis and conceptual connotation of the mutual empowerment of local culture and urban renewal, this paper constructs a logical framework for the mutual empowerment of both. Taking the urban renewal of Xiaoxihu in Nanjing as an example, the path and effect of mutual empowerment of local culture and urban renewal are explored. The research finds that: ① Local culture has the characteristics of regionalism, subjectivity, implicitness, normativity, and integration. The material, social, psychological, behavioral, and institutional elements it possesses can provide intrinsic motivation for the emergence and sustained promotion of urban renewal; ② Urban renewal is comprehensive, action-oriented, and process-oriented. It can provide a field of practice for the dynamic construction of local culture through spatial renewal, vitality shaping, emotional connection, action guidance, and institutional guarantees; ③ The mutual empowerment of local culture and urban renewal is mainly reflected in the awakening and manifestation of local memory, the continuation and regeneration of social networks, the infiltration and strengthening of emotional connections, the activation and transformation of community consciousness, and the upgrading and evolution of deliberative traditions; ④ The mutual empowerment of local culture and urban renewal is a process of synergistic coexistence of five dimensions: place, social group, emotion, action, governance. The effect of mutual empowerment is to promote the renewal area to become a new regional community, living community, spiritual community, behavioral community, and governance community. The interaction between local culture and urban renewal requires continuous observation, feedback, and guidance.