This research explored design opportunities and new challenges with a paradigm shift toward participatory processes in neighbourhood regeneration. Further, it emphasized the significance of local businesses and their local knowledge to overcome the challenges faced by designers. Three types of local knowledge Handler was established based on the Literature Review: Possessor, Processor, and Implementer. Through content analysis on 30 practical cases, 18 types of Actors in the process of participatory neighbourhood regeneration were identified. Based on these findings, two ways of local businesses’ contributing to neighbourhood regeneration projects were proposed: as a knowledge reservoir, and as a neighbourhood guide. As future studies, the authors suggest 1) understanding the types and forms of local knowledge possessed by local businesses and how to motivate them to share their knowledge; and 2) devising new methods of participation for local businesses that can enhance designers’ capabilities in neighbourhood contexts.