It is a widely spread misunderstanding that highly insulated buildings perform poorly with respect to theindoor environment. Furthermore there is a misunderstanding that the primary energy used to produceinsulation materials is of such a magnitude that it is no longer feasible to increase the insulationthicknesses beyond current levels (up to 300-450 mm as roof insulation in cold-climate countries, butvery much country-dependent).The paper provides argumentation for increasing the insulation level beyond current levels issustainable both looking at primary energy for production and environmental load. To judge the indoorenvironment, a recently constructed highly insulated house is monitored with regards to temperatureand energy consumption. To obtain further information on the indoor environment, interviews areconducted with the inhabitants of the house. The house is shown to have low energy consumption forheating (half of the requirement of the national building code) and an indoor environment equal orbetter than traditional houses. Good indoor environment and added insulation is therefore notcontradicting but follows nicely hand in hand.