Different climates may need different design strategies for optimal thermal performance of buildings: the relationship between different texture of the cities (their form and morphology), the energy demand of buildings and the outdoor microclimate are essential parameters for a sustainable urban planning. Based on these assumptions, we propose an energy and microclimatic analysis of two districts of the city of Nablus (32°13’ N, 35°16’ E): the old town and a new residential area. The study investigates the design features of residential buildings, as well as their energy demand for heating and cooling. A list of bioclimatic strategies retrieved from the local vernacular architecture is provided (efficient use of materials, construction type and forms); based on the results, interventions for the new district are proposed and guidelines to improve the energy efficiency and the outdoor microclimate are provided for the city of Nablus. The results indicate the importance of taking microclimate strategies and building envelope technologies into account for energy efficiency and thermal comfort. The results can be adopted for further research to optimize the building envelope in hot and arid climates in order to mitigate buildings’ energy demand and improve the outdoor and indoor thermal comfort.