The discovery of oil in the Gulf States during the late 1930s initiated a period of rapid modernization, catalyzing the transformation of the region’s historical districts into dynamic global commercial hubs. This change prompted the destruction of cultural heritage and highlighted the drastic effects of post-oil modernization on cultural identity. In response, heritagization has recently emerged as a strategic approach to addressing challenges related to cultural identity. This process leverages the reconstruction of cultural heritage to drive economic growth, creating a unique cultural identity that balances tradition with modernization. While heritagization offers economic and tourism benefits, concerns such as over-commercialization, cultural commodification, and alteration of cultural identity require critical consideration. Souq Al Baraha, inaugurated in Bahrain in 2021 as a cultural shopping destination, serves as a notable example of heritagization. It embodies the intersection of tradition and modernity by seamlessly integrating cultural heritage with contemporary design. While this fusion of traditional elements with modern amenities offers a unique shopping and entertainment experience, it tends to reduce the role of heritage to retro- aesthetics, projecting an interpretation of cultural identity. This paper aims to critically investigate the impact of heritagization and urban modernization on the cultural identity of the Gulf region using Souq Al Baraha as a case study. It seeks to answer how the dynamics of heritagization and urban modernization, contribute to the formation of a redefined cultural identity within the context of Gulf’s region’s cultural preservation initiatives.