Abstract: The invention is a composite masonry block having a front surface and a back surface which are adjoined by first and second side surfaces, as well as a top surface and a bottom surface each lying adjacent the front, back, and first and second side surfaces. Each of the side surfaces has an inset spanning from the block top surface to the block bottom surface. The block top surface has one or more protrusions positioned adjacent the first and second insets on the block top surface. In use, the blocks may be stacked to provide an interlocking structure wherein the protrusions of one block interfit within the insets of another block. The invention also comprises a method of block molding and a mold assembly which may be used to make a block which may be stackable to form structures of varying setback.