The exhaust air insulation (EM) wall is a novel type of air permeable wall that is characterized by a permeable porous layer. Such a wall design provides a solution to combine the building envelope with exhaust air heat recovery, and allows the exhaust air from a conditioned room to permeate through. The exfiltration process of the exhaust air across the porous layer can partly reduce the inward conductive heat flux through the wall. This makes the temperature at the innermost surface of the EM wall close to the temperature of the indoor air, and leads to the reduction of cooling and heating loads through the wall. In this study, a comprehensive heat transfer model was developed to analyze the steady state thermal characteristics of the EAI wall. Forty different experiments were performed to verify the proposed model. A quantitative analysis was conducted on the differences when using the unsteady state model and proposed steady state model for the EM wall with an outdoor thermal disturbance. A sensitivity analysis was carried out to investigate the impact of the design parameters on the thermal characteristics of the EAI wall. The results showed that using a porous material with relatively low thermal conductivity such as phenolic foam is beneficial to improve the heat recovery performance and thermal insulation of the EAI wall. The thermal insulation of the EAI wall is mainly due to the exfiltration process of exhaust air across the porous material. Considering the impact of the design parameters on the thermal characteristic, total thickness and pressure drop, a thickness of 30-50 mm is recommended for the porous material. At an exfiltration velocity of 0.003 m/s, the U-value of the EAI wall was lower than 0.1 W/(m(2) K) for a porous material thickness of 30-50 mm. These results demonstrate that the EAI wall is applicable to both energy-efficient retrofitting of existing buildings and new buildings, and can potentially contribute to reduce the cooling and heating loads through the wall by the utilization of low-grade thermal energy in exhaust air.