In hot climate, phase change material (PCM) can be incorporated into building envelopes to reduce heat gain through the building envelopes and therefore reduce its cooling demand. In this study, the energy performance of building envelopes integrated with PCM has been explored using a popular dynamic building performance simulation package, EnergyPlus, and the energy saving mechanism of PCM was investigated. The simulation results reflected that PCM could effectively help to reduce the building's annual energy consumption by 20.9% for Guangzhou, China. In addition, for the Guangzhou city, 27 degrees C transition temperature, smaller thermal conductivity of roof, and higher amount of PCM can all help to improve the building's energy performance. Additionally, it is suggested that in real building development/retrofit projects, the selection of PCM needs to be based on both their thermal properties and the local climatic conditions of the building.