Improved energy efficiency in the building sector is a central goal in the European Union and renovation of buildings can significantly improve both energy efficiency and indoor environment. This paper studies the perception of indoor environment, modelled indoor climate and heat demand in a building before and after major renovation. The building was constructed in 1961 and renovated in 2014. Insulation of the façade and attic and new windows reduced average U-value from 0.54 to 0.29 W/m2·K. A supply and exhaust ventilation system with heat recovery replaced the old exhaust ventilation. Heat demand was reduced by 44% and maximum supplied heating power was reduced by 38.5%. An on-site questionnaire indicates that perceived thermal comfort improved after the renovation, and the predicted percentage dissatisfied is reduced from 23% to 14% during the heating season. Overall experience with indoor environment is improved. A sensitivity analysis indicates that there is a compromise between thermal comfort and energy use in relation to window solar heat gain, internal heat generation and indoor temperature set point. Higher heat gains, although reducing energy use, can cause problems with high indoor temperatures, and higher indoor temperature might increase thermal comfort during heating season but significantly increases energy use. © 2018 by the authors.