Abstract: This study investigates the effects of introducing internal courtyard on thermal comfort performance of a case study terrace house in Kuala Lumpur Malaysia. The inclusion of an internal courtyard in building design is attributed to maximize the thermal interactions between the building and outdoor environment. However, different design details of the building composition will result in various climatic effects of internal courtyard. Based on computer simulations, the introduction of internal courtyard into a typical Malaysian terrace house will increase heat gain in the indoor spaces which do not have any openings to the outdoor environment except into the courtyard. In contrast spaces with openings to the outdoors as well as courtyard will experience better thermal conditions. The behavioral effects of the courtyard on indoor thermal condition is affected in relation with envelop openings. Since more solar radiation will penetrate in the house through the internal courtyard, sufficient and effective openings with suitable shading device as well as suitable material for its walls will help to improve the thermal condition in surrounding spaces of the courtyard.