Buildings account for 40% of energy consumption. In a hot humid climate zone a great deal of this energy is consumed in cooling and air-conditioning. Thermal insulation provides a practicable and cost-effective means of reducing system electricity consumption and CO2 emissions. Building insulation refers to any construction material in a building used as insulation for thermal purposes. This term also applies to acoustic insulation, fire protection and impact insulation. This paper presents a study on awareness of housing developers and home owners on the utilization of insulation materials in the building industry. The research aims to address and determine challenges facing the implementation of building insulation techniques in Malaysia, where currently houses with insulation represent less than 2% of the total stock of 4.5 million units. In this study two methods have been implemented i.e. (1) a quantitative survey in the form of two different sets of structured questionnaires for housing developers and end users, and (2) qualitative research in the form of a semi-structured interview targeting various professionals and stakeholders from the construction industry. The study suggests that around 75% of house occupants use air-conditioner units to improve the indoor thermal comfort and only 22% of the respondents were aware of the effects of insulation on thermal performance of their houses. The implementation of building insulation will have an immediate impact on reducing total energy demand and mitigating GHG's emission in Malaysia.