Heating accounts for the largest share of final energy demand in Europe, making the decarbonization of this sector central to achieving climate and energy policy targets. District heating (DH), particularly when integrated with renewable sources, offers a pathway to reduce greenhouse gas emissions, enhance system efficiency, and improve energy security. Yet, current DH systems remain challenged by centralized structures, limited prosumer engagement, and weak incentives for demand-side flexibility. This thesis explores how market strategies can strengthen the role of prosumers and enable demand response in renewable district heating (RDH). The research combines a comprehensive literature review with a scenario-based modeling analysis of the Italian heating sector.