The city walls of Old Beijing were the most important heritage structure demolished in the city's modernisation process. They were a defence facility and also a unique structure creating the city's landscape, defining its spatial order and making it a temple. Their demolition was not a technically inevitable result but a political mistake. Employing literature review, case study and field study, this thesis creates a solid knowledge base, upon which a restoration plan is proposed using Indirect Conservation and Replacement approaches to restore both the city walls and city context. This study identify and analyzes three key components of the walls and their related variables, and concludes that most of those variables are flexible for modification, and thus the demolished city walls can be restored in modern forms, which can benefit both the preservation of the historic city and its sustainable development.