This paper examines the dynamic interplay between language policy and local stakeholders in the process of dialect planning in the city of Shanghai, in the context of social tensions surrounding the decline of Shanghai dialect in mainland China. A process-oriented Language Management Theory (LMT) model is adopted as the analytical framework to reveal the interactive facet of micro language planning. Drawing on in-depth interviews and document analysis, the paper analyzes and interprets ten key players' perceptions and experiences in relation to the 'saving Shanghai dialect' movement. Qualitative data analysis demonstrates five stages in the dialect planning process and reveals how individuals' agency, when struggling and striving for local language rights, exert bottom-up influence upon language policy-making. The findings also unravel the social political duality between macro structure and individual agency. The paper ends with a discussion on the need to negotiate the individual agency in a more interactive and democratic dialog with predefined policy constraints. This study may have implications for multilingual/multidialectal contexts in other geographical locations where linguistic diversity in the local contexts is encountering shifts in language use and language changes. Besides, this study may also enrich applicability of the LMT framework which reveals the interactive and dynamic process by unbundling individual responses and influences on language planning.