Purpose-French universities can play a key role in generating Smart City approach through an innovative Public-Private Partnership dedicated to urban transformation. Methodology-We led an action-research study for five years with several research and pedagogic projects including users or citizens. Findings-The paper points out main factors of Smart City development. It also presents shared demonstrators’ characteristics including industrial scale, sustainability and citizens’ participation. Practical implications-University of Lorraine diversification strategy through the “Chaire REVES” supported by public and private partners. Social implications-At regional level, industrial-university-territorial partnerships could tackle both societal and economical issues “with”, “for”, and “by” citizens. Originality/value-Based on the Living Lab concept our case study shows a concrete regional university strategy involving: user-centric design, collaborative processes, citizens’ workshops and new financial and organizational answers enabling collaboration between private companies and public institutions. Our paper also argues that innovative public and private partnership involving users are necessary for developing smart cities.