Abstract: As a result of a funding proposal for an international development and academic exchange program, a joint urban planning and design studio was initiated in 2014 between Seoul National University and Diponegoro University from Indonesia. The studio's objectives were to expose students to the urban planning issues of dealing with environmental hazards - the constant threat of a volcanic eruption - in a relatively remote rural area in Central Java Indonesia, challenging and enhancing individual students' problem-defining and problem-solving skills. Faculty members and graduate level students from both institutions participated in the studio whereby intense group collaborations, site survey and fieldtrips were conducted. Through this experience, students utilized local knowledge in introducing community-specific risk responsive measures whilst overcoming the problems of unfamiliarity through constructive intercultural collaborations. In this paper, the process of the studio development is discussed in respect to the pedagogical values of studio-based education, and design proposals for two neighborhoods are described which highlights the possibility of living in harmony with disaster through various social and physical interventions. In conclusion, the results of the studio are discussed in terms recognizing environmental hazard as a vehicle for understanding local perceptions, the advantages of designing through the use of local knowledge, and the need for a holistic approach in urban planning and design.