Abstract In order to obtain fundamental data on the thermal performance of a semi-underground room, a twin-type test house was constructed on the campus of Tohoku University in September 1984. The test house has two rooms with south-facing windows above the ground surface, and a corridor between the two rooms. The floor level is 1.3m below the ground surface. Thermal insulation 0.1m deep and 1.35m wide was installed horizontally around the room on the east at a level 0.3m below the ground surface. The room on the west has no such “horizontal” insulation. Five-year measurements of air temperatures in both rooms, soil temperatures around the rooms, energy consumption for space heating, and so forth were made in four different situations. An experimental study found that horizontal insulation was effective in reducing the annual temperature fluctuation of indoor air, and in reducing the heating load. These effects, which were also analyzed from the viewpoint of heat balance in the room, were verified by computer calculations based on the two-dimensional finite element method.