Traditional architecture is one of the most important segments in the preservation and development of cultural identity. The Lake Skadar region abounds in examples of vernacular building activity that provide the clearest evidence of the creation of settlements and houses as a result of adaptation to natural environment. The study of vernacular architecture on the shores of Lake Skadar is related to the identification and potential evaluation of its local traditional features, as ecological building forms which express the principle of sustainability. Within the framework of research on vernacular architecture of this area, analysis is undertaken with the aim of defining guidelines for revitalizing traditional settlements in this region. In this respect the emphasis of this work is on recognizing the potential and possible directions in revitalization of cultural heritage of traditional settlements in keeping with the principles of sustainable development.