The ongoing digitalization of society is of increasing importance for city transformation and a driving force for cities to become smart. The aim of this study is to explore stakeholder challenges in becoming a “smart old town” and to contribute with innovative implications based on stakeholder involvement and governance. An interpretative single case study with qualitative interviews was conducted in an old town district in a Norwegian city. The results reveal that in order to transform a city with cultural heritage into a smart city requires efforts that go beyond smart ICT implementations. We argue for collaborative governance based on an open and coordinated involvement of stakeholders.