Urban marketplaces are increasingly recognised in European policy debates as multifunctional public spaces that extend beyond their traditional economic role. Across the European Union, emerging trends point to a shift towards market models that integrate social interaction, cultural activities, tourism, sustainable food production and place-based urban development, thereby contributing to more inclusive and liveable cities. However, the extent to which such transformations align with local actors’ perspectives and existing governance arrangements remains underexplored, particularly in Central European contexts. This paper evaluates the transformative potential of urban marketplaces as multifunctional public spaces from the perspective of key stakeholders in the City of Zagreb. The study adopts a mixed-methods approach, combining a desk analysis of European policy and practice trends with empirical research conducted at the local level. Data were collected through surveys of marketplace users (citizens) and vendors (tenants), complemented by focus groups with other relevant local actors. This approach provides insights into everyday practices, perceived barriers, governance challenges, and future expectations related to marketplace development. The findings reveal a strong alignment between stakeholder perspectives and European policy trends promoting people-centred and multifunctional marketplaces, while also identifying tensions with existing management and governance frameworks. Citizens emphasise the cultural, social, and tourism value of marketplace interactions, whereas vendors and governance actors highlight infrastructure needs and the importance of more participatory governance arrangements. The paper argues that stakeholder-based evaluation of transformative potential is essential for advancing inclusive, resilient, and sustainable urban regeneration through urban marketplaces.