This paper sets out the results of the York Energy Demonstration Project and discusses its implications for the modernisation of low rise housing in the UK. The project consisted of three schemes, which were carried out in the early to mid 1990s and monitored over a 2-year period. Results indicate that modernisation schemes have a very important part to play in reducing CO2 emissions and that improvements in the region of 50% can be achieved at modest cost using well proven (early 1980s) technology. The possibility of additional improvements are also identified which could see emissions fall by a further 30-40%. In addition, the project identifies difficulties posed by, often small, variations in dwelling construction, which can have a disproportionate impact on costs, and by the design and use of mixed heating systems which can reduce overall heating efficiencies. The paper also discusses the impact of the demonstration project on the dissemination of good energy efficient practice within the Local Authority and highlights the lessons learned for implementation in future modernisation schemes.