A case study is conducted on Lijiang city, China, and the underground space governance concepts for small and medium-sized cities that match the conformal, intensive, green, and intelligent underground space are explored. This study was performed to promote the highlevel management and highquality development of underground space in small and mediumsized cities, alleviate the shortage of urban construction land, improve the comprehensive carrying capacity and quality of public space, and enhance the resilience of the city. Furthermore, an undergroundspace governance path based on the "coordinating elementsoptimizing structureguaranteeing functionrealizing valueguaranteeing mechanism" is proposed. Finally, the following suggestions are proposed: (1) Groundwater as well as historical and cultural protection should be preferentially considered to promote green underground space and human culture. (2) The development mode of pointaxis form and shallow development should be considered as the key factors in promoting intensive and efficient space development. (3) Underground municipal, transportation, and safety facilities should be emphasized to enhance the safety and resilience of underground spaces. (4) Underground space control and "OneMap" construction can be used to promote the smart management of small and mediumsized urban spaces.