Besides its systematic identification with disasters and hazards, resilience could be a powerful tool for understanding changes in the built environment. This study analyses the development of the workers’ residential area in one industrial community (IC) in China after its economic transformation. How can a resilience approach help analyse the impact of economic changes in the built environment? The ICs first emerged in socialist China in the 1950s and were used to organise social production (factory) and collective life (workers’ residential areas). Although existing research has explored the possible changes in the built environment of ICs before and after economic transformation, these changes that have either taken place or are still taking place have never been quantified. Furthermore, as the most unique and distinctive feature of the built environment, the impact of changes in the level of enclosure of workers’ residential areas after factory bankruptcy has rarely been explored. This study, therefore, uses a resilience approach to analyse the impact of changes in the level of enclosure on the built environment after the factory bankruptcy by taking the case of Shanxi Knitting Factory (SKF) in Taiyuan, China. This study seeks to use resilience to understand changes in ICs under the background of China’s economic transformation. The finding shows that the factory bankruptcy significantly impacts the changes in the built environment of its workers’ residential area as well as impacts the level of enclosure in the built environment. With the disappearance of enclosures after the factory bankruptcy, the workers' residential area is gradually shifting from an enclosed, isolated, centralised and self-contained industrial auxiliary facility to an open, diversified and heterogeneous space and gradually integrating into the surrounding neighbourhoods of the city.