Named Hutong Bubble 218, the overhaul is hoped to revive the hutong – a type of alley formed by lines of traditional courtyard residences – and attract more people to the neighbourhood in the Qianmen East area.
It forms part of MAD's ongoing project that spotlights the potential of these ancient neighbourhoods in the Chinese capital, which are continually being damaged and demolished due to rapid urban development.
"This is a micro-utopian ideal,"said Ma Yansong, the studio's founder. "I hope that these bubbles will serve as vital newborn cells, giving the traditional hutong new life, and revitalising the community."
MAD's first overhaul of one of Beijing's historic courtyard houses, Hutong Bubble 32, was carried out in 2009 and involved the installation of one mirrored bubble that contains a bathroom and staircase.
Its latest intervention, Hutong Bubble 218, is based in a dwelling near the Forbidden City palace that was built in the late 1800s to house Beijing's first international hospital.
The building was later transformed into a residence for more than 20 families, but left abandoned after several structural interventions led to its dilapidation.
MAD has added two sculptural "bubbles" to the rooftop of the old courtyard house, which are not visible from the outside the hutong.