New research has identified vacuum insulation panels (VIPs) as highly efficient insulators for use in building construction. They are reported to be several times more effective than conventional materials of a similar thickness in terms of thermal conductivity. Because of their smaller space requirement, VIPs maximize the internal usage area of buildings and so reduce the cost of construction. There are however some obstacles that have hindered the application of VIPs, notably their high cost, susceptibility to perforation and the long-term water and gas effects that worsen their performance. This paper reviews the contemporary research on VIP as a state-of-the-art material for building insulation. The main components and physical principles of VIP performance are discussed. Finally, the review of VIPs available on the market and their performance is provided. (C) 2013 The Authors. International Journal of Energy Research published by John Wiley & Sons, Ltd.