The present study deals with energy conservation in buildings via reduction of cooling-and-heating transmission loads through walls by optimizing the indoor air-temperature settings. Maximum energy-saving and thermal-comfort are obtained for both yearly- and monthly-fixed thermostat settings. The transmission loads are calculated under the climatic conditions of Riyadh by using a dynamic heat-transfer model based on the finite-volume implicit procedure, which has been validated previously. The study utilizes a basic thermal-comfort chart where indoor air temperatures are selected inside the summer and winter comfort-zones, as a function of relative humidity, in a manner to provide the highest comfort-level while maximizing energy savings. The yearly-fixed thermostat settings range between 21.6 degrees C and 24.1 degrees C (70.9 degrees F and 75.4 degrees F), and those for the optimized monthly-fixed settings range between 20.1 degrees C and 26.2 degrees C (68.2 degrees F and 79.1 degrees F). For the yearly-fixed thermostat settings, the results show that about a 10% reduction in yearly cooling transmission load can be achieved per 1 degrees C increase in thermostat setting. Despite a corresponding increase of about 14% in yearly heating transmission load, a net saving in the yearly total energy cost of about 4% can still be affected per 1 degrees C increase in thermostat setting within the comfort zone. However, much bigger savings are achieved by utilizing an optimized monthly-fixed thermostat setting scheme developed in this study. Savings in energy cost between 26.8% and 33.6% compared with the yearly-fixed settings are obtained depending on the value of yearly-fixed setting. The corresponding reductions in peak loads compared with the yearly-fixed settings range between 13.5% and 25.6% in summer, and between 15.1% and 31.9% in winter depending on the yearly-fixed setting. These percentage savings in energy cost and reductions in peak loads are conservative since the yearly-fixed settings are themselves selected for high annual energy-savings while maintaining a high level of thermal comfort throughout the year. (C) 2007 Elsevier Ltd. All rights reserved.