Against the backdrop of the deepening implementation of new urban development and urban renewal strategies, PPP projects for the transformation of historical and cultural districts have become a crucial approach to preserving the city's cultural heritage and enhancing its quality. However, the reasons for the investment risks associated with such projects are complex. It is of great practical significance to systematically identify the key risk factors from the perspective of project operators, in order to ensure investment safety and sustainable operation. Based on the perspective of project operators, the DEMATEL-ISM integrated method is used to identify and analyze the transmission mechanisms and hierarchical structure of the risk factors affecting PPP projects for the transformation of historical and cultural districts. Research indicates that risk factors can be classified into a hierarchical system with 7 levels. Among these, changes in PPP policies, increased regulations regarding cultural heritage protection, and uncertainties related to the duration and extension of franchising agreements are the fundamental driving factors. Government payment defaults and inadequate mechanisms for sharing risks within contracts are key intermediate factors. On the other hand, failures to meet expected rental and sales revenues, as well as rising operating costs, represent the superficial factors. The research findings presented in this paper can provide a theoretical basis and decision-making support for project operators to systematically identify risks and optimize management strategies. They are of great significance for ensuring the sound implementation and long-term operation of PPP projects related to the transformation of historical and cultural districts.