This research is an effort to revive the use of courtyard housing clusters in a modern context, which were traditionally known for their distinctive passive cooling performance. The goal is to promote energy efficient design in hot-arid climates and temperate climates by reviving the use of courtyard housing clusters. The objective is to introduce a simplified thermal model that simulates the courtyard microclimate, which has been tested with actual field data from a case study house. The case study house was an indigenous courtyard house in Cairo, Egypt that was built around 1400 AD, having an area of about 5000 sq. ft. (i.e., comparable to the size of a single-family house) with heavy thermal mass. To accomplish this, a finite difference thermal network model was created for simulating the case study courtyard microclimate. The finite difference (FD) model showed validity as it calibrated very well against field data. This model allowed running parametric sensitivity studies on the courtyard thermal simulation factors: air change rates, thermal mass, solar absorption, wall and floor emissivity, ground temperature, cloud cover, and ambient air temperature. The results of the parametric analysis showed that the model was sensitive to variations in the air change rates, solar absorptivity, and ambient air (rooftop) temperatures. The courtyard microclimate model was then used in combination with thermal simulation software (DOE-2) to analyze the thermal performance of the case study house, which was also validated with measured field data. The DOE-2 program showed limitations when applied to the case study, non-conditioned building, and showed a convergence deficiency when simulating high thermal mass buildings. The DOE-2 program did not perform well in simulating the impact of changes in thermal mass as compared to previous published field measurements. The proposed combinations of the FD microclimate/DOE-2 simulation did not perform as well as the FD microclimate simulation. The FD courtyard microclimate simulation model with onsite data for calibration is advantageous in introducing for the first time the ability to perform computer simulations on any number of proposed courtyard design alternatives for reaching optimum thermal performance.