Integration of the phase change materials (PCM) into the external building walls is an efficient method for reduction of energy consumption and regulation of energy demands due to increasing thermal inertia of the walls. This study aims to reveal the contribution of latent heat to the thermal performance of the wall and to determine the location, thickness and melting temperature of PCM for the maximum exploitation of latent heat for different climatic conditions. A comparative study is carried out for the wall coupled with PCM and the wall with Phase Stabilized PCM (PSM) to reveal the improvement provided by the latent heat. The influence of location, fusion temperature and layer thickness of PCM on energy saving, decrement factor and time lag was examined. The annually optimized PCM fusion temperature and layer thickness which utilizes the latent heat at maximum level considering both heating and cooling loads are determined for three cities of Turkey. The computed results show that the monthly optimized PCM melting temperature and PCM layer thickness vary from 6 to 34 degrees C, from 1 to 20 mm depending on climatic conditions, It was concluded that an optimization study should be conducted in order to prevent PCM behaves like PSM.