This study presents the characterization of the thermal properties of straw fiber stabilized mud block [SMB] and evaluates the thermal performance of building envelopes to moderate the indoor temperature. 0.1% to 0.2% of straw fiber and 5%-7.5% cement was mixed with the soil to prepare 5 different types of samples for thermal characterization. The findings show that the addition of 0.2% of straw fiber reduces the thermal conductivity coefficient (k) by 43% and improves the thermal resistance of earthen building envelopes by 76% while decreasing their density (ρ). The experimental outcomes were used to simulate the thermodynamic behaviors of a single-story residential building using Energy-Plus software to understand the effect on indoor comfort indicators such as mean radiant temperature (MRT), air temperature (AT), and operational temperature (OT) by changing the exterior wall material with locally available materials. The result demonstrates that during the outdoor peak temperature at 3 pm, the mud block wall can decrease the indoor temperature up to 2.18 °C which is the lowest among all the conventional buildings. During the indoor pick at 7 pm, the temperature of the mud block house is 1.67 °C, 1.47 °C, and 2.31°C less than brick, concrete, and Corrugated Galvanized Steel (CGS) sheets respectively. The result shows that SMB houses offer more comfortable living conditions and are better suited for naturally ventilated houses.