This paper looks at the principles that underlie heritage conservation in urban areas, using the City of Sydney as an example, and comparing it to aspects of the conservation controls in the Historic Centre of Macao. Effective heritage conservation includes both controls and incentives, and is based on a comprehensive understanding of the significance of the place and its components (including both individual items and conservation areas), accurate mapping of both the place and its setting including significant views, and integration with other planning and environmental controls. Fundamental to the process is a step-by-step approach that assesses values independently of other considerations, and in the case of development a thorough assessment of the heritage impact of all proposed works within the place.