According to one survey on energy consumption in Iran, commercial and building sector consume more energy than any other economic sectors. For example, about 38% of total energy that consumed in year 2001 has been used for space heating. Insulation in external walls of buildings has an important role to reduce the environmental effects on indoor space condition. Therefore, always using insulation is an alternative to avoid from the energy loss. In this paper, the effects of the using of a proper insulation on the energy saving in Iranian buildings are studied. For this purpose, an integrative modelling is used for simulation of the energy consumption in buildings. It is shown that energy consumption per square meter of buildings can be reduced up to 35.2% when insulation is used for external walls. (c) 2005 Elsevier Ltd. All rights reserved.