The complexity of the concept of urban culture since the advent of modernity necessitates a dynamic and relational perspective for understanding its evolving role in urban development theory. This study investigates the historical transformation of culture’s mediating function—or the role of “beauty” as a catalyst—in shaping modern urban development across different periods. Employing literature review and integrative analysis, the research traces representative theories and policy practices internationally, using time as a narrative thread to construct a long-term, macro-level view of cultural influence in urban planning and transformation. 1) The study identifies three main phases in the evolution of culture’s mediating role. Firstly, the emergence of urban beautification in the context of rapid urbanization during the late 19th and early 20th centuries, including the City Beautiful Movement, the institutionalization of public art, and modernist aesthetic interventions. These efforts treated beauty as both a governance strategy and a means of social order. Secondly, from the 1980s onward, cultural planning tools such as Cultural Mapping and the designation of Cultural Districts marked a shift toward recognizing and utilizing cultural assets as endogenous drivers of economic revitalization and urban identity. Thirdly, the rise of creative economy discourse—from the Creative City paradigm to Creative Class theory and Creative Placemaking—positioned creativity as an integral force in shaping economic competitiveness, spatial production, and community life in cities. 2) The research further conceptualizes urban culture as composed of four interrelated dimensions: beauty, art, culture (as way of life), and creativity. These facets interact as part of a broader cultural mechanism that responds to economic cycles, technological transformations, and social change. Beauty is identified as an aesthetic objective pursued across different stages of urban growth; art serves as a representational vehicle of collective identity; creativity emerges as a dynamic force that produces cultural innovation and value; and culture, in its anthropological sense, anchors tradition and continuity while offering resources for regeneration. Together, these dimensions form a conceptual prism through which the mediating power of culture can be analyzed over time. 3) This prism model is aligned with long-wave theories of economic development, particularly the Schumpeterian notion of techno-economic cycles. The phases of cultural intervention in urban development—beautification, cultural rediscovery, and creative production—coincide with major waves of technological and economic transformation. For instance, urban beautification paralleled the electrification era of the early 20th century; cultural policy innovation matched the emergence of post-industrial society and service economies; and creative strategies have risen alongside the digital revolution and knowledgebased economies since the 1990s. These patterns suggest that cultural mediation is not merely decorative or symbolic but plays a strategic role in urban resilience and adaptation across economic phases. 4) Furthermore, the study highlights how shifts in cultural discourse—from elite high art to everyday aesthetics, community-based art, and participatory culture—have expanded the inclusiveness and applicability of cultural strategies in urban governance. The concept of culture has evolved from being an external add-on to becoming an intrinsic component of urban policy logic. These developments underscore the necessity of understanding culture not just as a static repository of heritage, but as a dynamic system of meanings and practices that can be mobilized to address spatial, social, and economic challenges. In conclusion, this research reveals that the integration of cultural elements—through the evolving functions of beautification, culturalization, and creation—constitutesa coherent and cumulative trajectory in modern urban development theory. By clarifying the mechanisms and dimensions of culture’s mediating role, the study provides a conceptual framework for advancing integrated urban policy and planning. In the context of China’s contemporary urban transformation, this framework offers valuable insight into how cultural vitality can be mobilized as a strategic resource in support of Chinese modernization.