With the gradual deepening of the development of high-quality urban transformation, the “Danwei Compound” urban space production method constitutes the basis of Chinese current urban spatial transformation. The transformation plan of the original danwei compound “stock” to promote the healthy development of urban society has become the focus of research. First, with the help of Lefebvre’s space production theory, combined with the spatial transformation characteristics of its own structural form experienced by the Chinese urban danwei compound, the space production is divided into three stages, namely, the diversity-orderly type average space of the danwei compound system period, dispersed type abstract space of the commercial enclosed community period, and the integrated differential space of a livable community undergoing regeneration and transformation. At each stage, the government, market, and residents have different influences on time-space production. Secondly, using Hefei’s typical danwei compound as the research carrier, according to the space ternary dialectics, a multi-level analysis of “representations of space-representational space-spatial practice” is carried out on the production mechanism, and the logic of different types of spaces in different periods are described. Among them, the representations of space of the change of the danwei compound are the interrelationship of multiple governance subjects in different periods, such as changes in the implementation degree of governance strategies, the degree of residents’ community governance participation, residents’ satisfaction with community governance, etc. The representational space is the residents’ community perception and interpersonal relationship at different transition stages, Interpersonal trust, and other social relations’ changes. Spatial practice is manifested in changes in the support of public service facilities, public space, per capita living area, building quality, architectural style, and illegal building area. Finally, the three-dimensional space dialectical coupling coordination degree model is used to analyze and compare the representations of space of typical settlements in the three stages and the coupling characteristics of the representational space and the practice of space. On this basis, we provide innovative ideas and put forward relevant measures and suggestions for the regeneration, transformation, and development of livable areas.