Abstract: An insulated wall assembly which combines strength with good insulating qualities includes spaced apart, elongated wooden posts, which are I-shaped in cross section; and elongated rigid foam plastic panels extending between adjacent posts, the panels being generally cruciform in cross section so that projections on the lateral edges thereof extend into the recesses of the posts while the front and rear or outer and inner surfaces of the panels are in the same planes as the outer and inner surfaces of the posts. Alternatively, the panels are parallelepipedic blocks with longitudinally extending, rectangular grooves in the sides thereof for receiving splines, which connect the blocks to rectangular, grooved insulating inserts in the posts.