The era of globalization has ushered in dramatic changes in the past decade covering a wide range of distinct political, economic and cultural trends whereby people adapt their houses to suit their needs and desires. This paper discusses the process of change analytically, emphasizing the importance of understanding the transformation of Lao traditional houses and its impact factors to the transformation and adaptation to suit with globalization trend, and conservation of the characteristics of traditional houses. This study takes place in Luangprabang, an ancient city of Lao PDR, which was designated as a world heritage city in 1995 as it is rich with diverse, tangible and intangible values. Five cases of traditional house in Luangprabang are examined to understand their transformation through time, by analyzing the basic spatial formation, components and elements, especially to find out the impact factors to such transformation. The study revealed that the transformation of the traditional house is subject to not just one single factor, but to a number of factors, where globalization, regulation, economy, and social aspect factors play a prime role and are the root for all these changes. The case study also indicates that these changes are connected to the benefits of income generation as a survival strategy for the low and middle-income people in Luangprabang as well as the housing demands. In the transition period a new residential type appeared accordingly, in which living spaces were categorized according to their general functions. There was a harmony between people's needs and the physical characteristics of the house.