Small historic towns rich in cultural and historical heritage play a key role in strengthening the identity of an area. An overview of the condition of small historic towns indicates a change in their roles and meanings. The historic cores of cities face a number of economic problems, changes in the demographic structures of the population, visual degradation of space that ultimately result in a change in the lifestyle and identity of cities. This paper presents how culture can be a powerful driver of sustainable development of small historic towns. Culture can be linked to different dimensions of human development, and it is important to include culture in the sustainable city planning model. Development that includes culture can result in significant economic and non-economic effects such as income generation, increased employment and respect for cultural diversity, strengthening cooperation and social cohesion. An example of a small historic town is the town of Trogir. The city is an outstanding example of the continuity of a city whose historic core is under UNESCO protection. However, like most small historic towns, Trogir faces the problems of non-existence of cultural heritage management plans, lack of intersectoral cooperation, seasonality and emigration of the local population from the city cores. In order to overcome the existing problems, it is necessary to put the local community at the center of consideration, as well as the protection and preservation of existing resources, the strengthening of cultural industries and a sustainable approach to cultural tourism.