Abstract: As China's urban development enters an in-depth phase of stock-based urban renewal, the industrial heritage of the Xinjiang Production and Construction Corps (XPCC), which carries unique physical imprints of the danwei system, is in urgent need of spatial reproduction against the backdrop of social transformation. Based on Lefebvre's production of space theory, this paper constructs a theoretical analytical framework to interpret the spatial production mechanism of XPCC's industrial heritage. Taking Shihezi Western Industrial Zone, Xinjiang as the research case, this paper dissects its spatial evolution: from power-led cohesive space under the planned system, to fragmented space disturbed by marketization shocks, and ultimately to restructured space shaped by multi-stakeholder gaming. This research pinpoints three core predicaments triggered by institutional shifts: vacancy of responsible governance entities, physically fragmented spatial layout, and ruptured collective memory of the Corps. On this basis, targeted optimization strategies for the sustainable development of XPCC's industrial heritage are put forward, including establishing a multi-party collaborative governance mechanism tailored to the institutional attributes of the XPCC, advancing spatial revitalization via mixed-use development, and reconstructing social identity rooted in the XPCC spirit. This study provides theoretical underpinnings and practical references for future research concerning the spatial production and regeneration of XPCC's industrial heritage.