This paper details the physical effects of a government sponsored, residential energy efficiency upgrade program in New Zealand, with data gathered from 100 houses located in Dunedin. House energy use and thermal indoor environment were monitored over a 2-year period. Houses were found to be 0.4 degrees C warmer (annual average increase) after the upgrade with a 0.6 degrees C increase recorded over the winter months, after being corrected for energy consumption and weather conditions. A small, but statistically insignificant, reduction in energy consumption was also found. In absolute terms, indoor temperatures were found to be very low and did not come close to WHO recommendations. The data showed occupants could be exposed to indoor temperatures below 12 degrees C for nearly half of the 24 h day during the three winter months. The findings were quite surprising as the upgrade program had the goal of making houses warmer and healthier by reducing heat loss through improved thermal insulation. Householders, however, provided very little heating to living areas and even less to bedrooms thus contributing to the less than desirable indoor thermal environment. (C) 2007 Elsevier B.V. All rights reserved.