New effective technologies and materials that have the potential to reduce energy demand with excellent energy efficiency and low environmental impact are urgently required in the Gulf Region. Dynamic insulation, which functions by recycling fabric heat loss back to the building, has been established theoretically and proven in pilot projects. It sets the green, low carbon benchmark for thermal insulation in buildings. This paper presents details of the Eco-Villa, its construction, how the performance of the villa was monitored, and the findings from the initial monitoring phase and the dynamic simulation model (DSM). The villa was tested in two modes, bypass (static) and dynamic. The static U value of the external envelop wall was estimated at 0.24 W/(m2·K) in bypass mode.