AS the first rays of sunlight hit the tops of the flagpoles in front of Lhasa's Jokhang Temple, Drolma Lhamo begins her daily ritual walk along Barkhor Street.

Strolling clockwise along the street, which encircles the temple in the heart of Lhasa, has long been a regular religious practice by Tibetan Buddhists.

For Drolma, the street has changed considerably since the 79-year-old first began walking there with her mother as a child. Stone pavement has covered a previously barren earth road, and street lamps now light the narrow side alleys. Signs hanging in front of stores are written in Tibetan, Chinese and English.

However, in front of the 1,300-year-old Jokhang Temple, pilgrims are kneeling on the ground and praying in much the same way they did centuries ago. Among them were grandmothers in traditional robes, middle-aged men coiling their plaits on top of their heads and teenagers wearing jeans.

Some live just five minutes away, while others have traveled from neighboring provinces. Many have been standing in line to enter the temple since before dawn.

Drolma was born and raised in a traditional-style courtyard on one of the 35 labyrinthine lanes leading to Barkhor Street. This area used to be a major residential district in old Lhasa.

"When I was a child, the courtyard was larger, but the buildings were also much more shabby, with mud walls and rough wood pillars. There was no electricity and we shared a well in the yard," she says. "I remember the courtyard was owned by a temple and the families living here rented rooms from them."

Today, the three-story buildings enclosing the courtyard are gleaming with windows framed by black and yellow trim. Some families grow colorful flowers on the balconies facing the yard.

In 1994, every home in the courtyard was equipped with electricity and tap water access. Although there used to be just one public bathroom for the entire courtyard, there is now a bathroom on every floor of every building.

Many of the courtyards around Barkhor Street have undergone similar renovations since 1979. Last year, the local government decided to restore and rebuild 56 of the most well-known courtyards.

However, even these refurbished homes cannot compete with the newly built modern apartments in the city's younger areas.

"Most of my old neighbors have moved out. At least half of the neighbors now are small-business owners and migrant workers," Drolma says.

She doesn't want to leave the area, even though her children keep asking her about it. "I'm used to the life here. It's really convenient for me to do my ritual walk," she says.

As the sun rises higher and early risers like Drolma head for a cup of tea at a nearby teahouse, more Lhasa residents flood onto Barkhor Street for the ritual walk.

Losang Tashi, taking a wood rosary in his hand, joins the walking crowd. He has just driven his son to school.

Like Drolma, Losang grew up near Barkhor Street, but he and his family have moved to a new house in the suburbs.

"When you get more money, you want a better life, with a private bathroom and a parking place," he says. "But I only feel at home on Barkhor Street."

He has returned to the area, in a sense, by operating a boutique hotel built into one of the courtyards, just 500 meters from his childhood home.

The 300-year-old courtyard was owned by Ling Rinpoche, a monk and teacher of the 13th Dalai Lama. The courtyard is now government property, but Losang has leased it from the government for 10 years.

"We invited artisans from the Trashihunpo Monastery in Xigaze to restore the courtyard to its original look. It took us a year, based on a blueprint from the 1930s. Every change must be approved by the cultural heritage department," he says.

All of the building's stone walls remain intact, and the position and number of the building's windows and doors have not changed. One room was slightly modified to make it suitable for serving drinks.

"As an old Barkhor resident, I would like to see the street maintain its original appearance. Changes cannot be avoided, but in what ways can we change?" Losang says.

He regards running the small hotel as his own way of protecting the old courtyards.

Although Barkhor Street is a very sacred place for Tibetan Buddhists, it also has a worldly aspect. It has been the commercial center of Lhasa for centuries.

When the sun hits its peak at mid-day, the street is packed with traditionally dressed shoppers from the countryside and tourists wearing fashionable coats and sunglasses.

Drolma still remembers horses carrying bags of black tea from Yunnan Province on Barkhor Street in the 1930s and 1940s.

The horses have completely disappeared, now that Tibet is linked with the rest of China by planes, trains and automobiles.

Small stores selling daily necessities have been replaced by souvenir and antique shops, galleries, restaurants and cafes. Tourism has boomed since the 1980s; about 6.85 million people visited Tibet last year.

Ratna Kumar Tuladar's shop remains in the same place where his grandfather opened his shop in 1925. The business itself, however, has changed considerably.

His grandfather sold Nepali food, clothes and spices, whereas Tuladar sells Buddha statues and Nepali jewelry. His grandfather exported Tibetan wool to Katmandu; Tuladar sends clothes and porcelain made in eastern Chinese provinces.

"Barkhor Street has changed a lot since I arrived here to take over the shop 26 years ago," Tuladar says.

He no longer needs to wait for a month or more to receive goods from Katmandu by horseback. It takes just one or two days by highway.

"Decades ago, there were only Tibetans and a few Nepalis running businesses on Barkhor Street. Now, we have people from everywhere. Tibetans, Muslims and Han people," he says.

The competition is also much heavier than it was during his grandfather's time. "Decades ago, profits accounted for 50 to 60 percent of total revenues, but now only account for 10 to 20 percent," Tuladar says.

However, Tuladar wants to carry on the family business and even plans to open a bigger shop to sell Nepali artwork in Beijing.

"The market potential is still big," he says.