Technological improvements and population growth make energy saving more important especially for developing countries. As known, a considerable amount of consumed energy is used for space heating in buildings; therefore, using insulation for external wall has gained more importance. In this sense, this study, which consists of two parts, examines the efficiency of insulation location and thermo-physical properties of various external wall materials (brick, reinforced and lightweight concrete). In the first part, the optimum insulation thickness of external walls for various wall materials and different fuel types in cold region (Eskisehir) has been investigated. The optimization is based on the P(1)-P(2) method. Besides, the effect of the thermal properties of different wall constructions and the location of insulation on time lag and decrement factor are studied; and then, the daily thermal behaviours of various wall constructions are simulated. In consequence of the study, time lags were determined between 4.34 and 6.74 on the outer insulated walls and 3.64 and 5.86 on the inner insulated walls. The decrement factor was computed between 0.008 - 0.023 and 0.019 - 0.029 respectively.