Cultural heritage was long absent from mainstream sustainability debates but its potential to contribute to more liveable, viable and equitable environments is now widely acknowledged. The actual contribution of cultural heritage resources to sustainability and a high level of quality of life for current and future generations is however seldom proven. The presented research initiative addresses this desideratum with a methodological study on how to improve the assessment of urban quality of life by means of indicators that take into consideration cultural heritage resources. The study was undertaken within a binational cooperation project of the programme INTERREG Poland-Saxony 2014–2020 funded by the European Fund for Regional Development (EFRE). Ten historic small and medium-sized towns in the German-Polish border area, that partake in the project REVIVAL! – Revitalisation of historic towns in Lower Silesia and Saxony, serve the research initiative as case study. The article presents the methodological study as an integral part of the project REVIVAL! and illustrates how both intend to leverage the potential of cultural heritage on the basis of integrated landscape management. In the study, urban quality of life studies were analysed and a draft list of cultural heritage related indicators compiled. Contribution of cultural heritage resources to urban quality of life and sustainable development were explored on the basis of desk research, expert consultations and focus group discussions. In the case study, cultural heritage was found to contribute to all three pillars of sustainability and predominantly to socio-psychological dimensions of urban quality of life, if adequately managed.