Nancy Buckle represents the fifth generation of her family to live in the four rooms carved into limestone cliffs.
But the unique house, which attracts thousands of tourists every year, has been deemed unsuitable to be lived in or even to receive visitors.
Miss Buckle, 52, fears for the House in the Rock, 300 ft above the river Nidd in Knaresborough, North Yorkshire.
She is concerned she could be forced to move and the Grade II- listed Georgian folly sold by its owners, the trustees of Ampleforth Abbey.
'I am afraid someone will buy it and change everything,' she said yesterday.
'I want the story, which my ancestors have told to thousands of visitors, to continue.'
Miss Buckle, a former hospital sister, is fighting to stay put and would be willing to act as a custodian if a buyer was found.
'I would like to be involved in showing people around. I know far more about the place than anyone else,' she added.
The folly was hollowed out of the rocks in 1770 by her great-great-great-great-grandfather, Thomas Hill.
It now has electricity and Miss Buckle maintains it is the perfect home.
She is supported by John Goodchild of the Yorkshire Archeological Society. 'It's really quite an extraordinary building. The atmosphere alone is worthy of preservation,' he said.
But Harrogate District Council have served a closing order on the property.
'We do not feel it's in a fit state for someone to live there unless a substantial amount of money is spent on renovation,' said the council's health director, Martin Dodsworth.
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