Several important problems are associated with heating of housing in Lithuania, Residential heating is heavily dependent on fossil fuel, combustion of which contributes to air pollution and atmospheric build-up of carbon dioxide. Subsidies from the State budget to maintain the residential heat price at a below-cost level declined in recent years, but are often still substantial. Eliminating subsidies for heat is politically difficult. Many households face difficulty in paying their heating bill, which has risen greatly in real terms in the past five years. The problem is amplified since most households in apartments are billed on the basis of their floor area, not on real heat consumption. The magnitude of the above problems is heightened by the inefficient manner in which energy is used to heat most residential buildings. This inefficiency concerns losses in transmission and distribution of district heat, high losses through the building envelopes, as well as lack of proper metering and control of district heat, imrpoving the energy efficiency of heating is recognized as an important goal for addressing the problems outlined above. This report describes housing and space heating in Lithuania. It discusses the process of privatization and how it affects heating energy use, as well as implementation of conservation measures and retrofitting. It also discusses some of the measures undertaken by both property owners and by governmental agencies that affect heating energy use. The report summarizes results from a number of recent studies of the potential for energy savings in heating Lithuanian multifamily buildings. We discuss barriers to realization of the potential, and institutional and financial approaches for overcoming them. In closing we recommend actions that should be taken soon to move Lithuanian housing along a path to greater energy efficiency.