The paper concern is the unique historical heritage and heritage value of China's historic towns, as well as the realistic dilemma that they are currently facing in terms of lack of culture and homogenized development, and puts forward its development strategy. The uniqueness of cultural genes determines that the direction of urban development must follow the sequence of cultural genes, and the unique core values of regional cultural genes provide scientific guidance for the sustainable development of cities. The paper firstly combs through the current research progress of historic towns and cultural genes to provide a realistic basis for the article. Secondly, it analyzes Tangqi Historic Town as a historic town, its material cultural genes and intangible cultural genes, and establishes a cultural gene genealogical map. The material cultural genes mainly include architectural culture and shipping and trade culture, and the intangible cultural genes mainly focus on folk culture. Finally, the article analyzes in-depth the Tangqi Historic Town, which is currently facing the reality of cultural resources decay, serious homogenization development, and low vitality of the historic town and other dilemmas. It also puts forward the path and way for the protection and inheritance of the cultural genes of Tangqi Town are proposed from the two dimensions of the architectural space of the historic town and the protection of cultural genes, so as to provide references for the protection and inheritance of the cultural genes of other similar historic towns along the Grand Canal.