In this study, optimum insulation position from maximum time lag and minimum decrement factor point of view has been investigated numerically. For this purpose, one-dimensional transient heat conduction equation was solved for a composite wall using Crank-Nicolson's scheme under periodic convection boundary conditions. Four-centimeter thick insulation was placed in different positions of 20-cm thick wall as a whole (1 piece, 4 cm) or as two slices (2 + 2 cm). Total six different configurations were selected as initial state, and these configurations were swept across the wall cross-section where time lags and decrement factors were calculated. Placing half of the insulation in the inner surface and the other half in the outer surface of the wall gives minimum decrement factor. On the other hand, maximum time lag was obtained in the case of placing two slices of insulation in a certain distance apart inside the wall. Placing half of the insulation in the mid-center plane of the wall and the half of it in the outer surface of the wall gives very high time lags and low decrement factors (close to optimum values). This configuration is very practical and can be done without any difficulty during construction. (C) 2000 Elsevier Science S.A. All rights reserved.