Thermal insulation is one of the most effective energy conservation measures for cooling and heating in buildings. Therefore, determining and selecting the optimum thickness of insulation is the main subject of many engineering investigations. In this study, the determination of optimum insulation thickness on external walls of buildings is comparatively analyzed based on annual heating and cooling loads. The transmission loads, calculated by using measured long-term meteorological data for selected cities, are fed into an economic model (P-1-P-2 method) in order to determine the optimum insulation thickness. The degree-hours method that is the simplest and most intuitive way of estimating the annual energy consumption of a building is used in this study. The results show that the use of insulation in building walls with respect to cooling degree-hours is more significant for energy savings compared to heating degree-hours in Turkey's warmest zone. The optimum insulation thickness varies between 3.2 and 3.8 cm; the energy savings varies between 8.47 and 12.19 $/m(2); and the payback period varies between 3.39 and 3.81 years depending on the cooling degree-hours. On the other hand, for heating load, insulation thickness varies between 1.6 and 2.7 cm, energy savings varies between 2.2 and 6.6 $/m(2) and payback periods vary between 4.15 and 5.47 years. (C) 2007 Elsevier Ltd. All rights reserved.