Living labs (LLs) are designed to address societal challenges, particularly in urban settings, by fostering collaboration among diverse stakeholders. However, many stakeholders, including users, often fall outside the organizational boundaries of LLs, making them difficult to manage and necessitating motivation for participation. This study explores the dynamics of stakeholder governance in LLs, proposing “adaptive governance” as a model to address the diverse interests and levels of engagement among stakeholders. The research, based on twelve LLs in the Elaborator project, examines key aspects impacting governance and suggests modulating engagement levels to foster collaboration and innovation. This approach contrasts with the linear methodologies of traditional project management, offering a more flexible framework to accommodate the varying needs and contexts of LL projects. The study’s findings highlight the importance of adaptive governance in effectively organizing and facilitating stakeholder participation throughout the co-creation process.