The aim of this research is to investigate the history of traditional and contemporary architecture in order to further improve design methodology in passive solar architecture, and presenting an example of an ideal energy efficient house that takes into account climate, comfort, passive solar systems and the history of architecture of Cyprus. Thermal performance of traditional, contemporary and solar buildings is discussed in relation to climate and in terms of the various aspects necessary for understanding such performances. These aspects include architectural design, constructional materials and methods, occupancy patterns and planning. Non-thermal comfort problems arising from the use of both traditional and contemporary buildings are also discussed, together with the attitudes that made the abandonment of traditional buildings and guided the development of contemporary buildings. Finally, recommendations of how traditional buildings can be used appropriately and contemporary buildings improved are considered and discussed. Different architectural and constructional elements and techniques (orientation, natural ventilation, vegetation, insulation, openings, direct gain, shape, thermal insulation, thermal storage, glazing, solar control, exploitation of spaces- solarium, courtyards, roofs, floors) that were used in traditional houses are studied in relation to their use in passive design today and serve as fine examples of energy-saving architecture. Cypriot traditional houses have proved to be superiorly energy-efficient when compared to contemporary homes due to the thermal performance of both cases based on their architectural design. Comparative annual energy use was performed using computer simulation software Energy 10 resulting that the most energy efficient is the experimental solar house (121 kWh/m²) following the traditional (243 kWh/m²) and final the contemporary (368 kWh/m²). Through 2 years hourly monitoring the solar house, using computer data loggers, the internal temperature and relative humidity throughout the year remained steady (within the thermal comfort limits), despite the instability of external temperatures and humidity percentages. Taking into account the general characteristics of the dry climate and the requirements it imposes on the building characteristics and the general characteristics and thermal performance of traditional and contemporary buildings, it may be concluded that traditional buildings in Cyprus meet the requirements imposed by the climate and that these buildings are good enough thermally to perform well under the prevailing weather conditions. Because of Cyprus climate, passive solar architecture works to its full capacity. This means that, a passive solar house has 100% energy saving potential. This theory has not remained at its conceptual stage as the experimental solar house has demonstrated it in practice.