There is a clear impact of urban investment in religious cities resulting from modern expansion projects, which may affect the spatial characteristics contributing to the formation of place identity. However, these relationships have not received sufficient quantitative investigation in the historic center of Karbala, Iraq. This research aims to examine the morphological, functional, and spatial transformations associated with urban investment and their potential implications for the spatial components of place identity by integrating Geographic Information Systems (GIS) and Space Syntax analyses. A comparative spatial analysis was conducted based on planning data, land uses, street network data, Geographic Information Systems were used to measure changes in land use and urban morphology. The street network was also analyzed using DepthmapX 0.8.0, based on the segment map, angular analysis, and a metric radius of 500 meters. The adopted indicators included Connectivity, T1024 Integration, and T1024 Total Angular Depth. The results showed significant morphological and functional transformations; residential land use declined from 35.02% to 28.58%, religious land use increased from 7.83% to 26.73%, and the tourism-related commercial land-use category, after harmonizing the classification, increased from 24.13% to 27.65%. The main streets around the two holy shrines had relatively high Connectivity and Integration values and lower Total Angular Depth values. The findings reveal measurable changes in land use, urban fabric and street-network configuration that could influence the spatial aspects of place identity through demolition and removal of old historic buildings. Integrating GIS and Space Syntax provides a framework for balanced urban development and historic-environment conservation.