Nearly 60% of electrical energy use in Hong Kong is for space conditioning during summer months. The paper investigates the impact of design-related variables on outdoor micro level daytime heat island effect in residential developments in Hong Kong. The paper hypothesizes that the differences in outdoor temperatures within and between residential developments can be explained by the impact of design-related variables on the overall environment. Case studies of three large housing estates reveal urban heat island effect (UHI) in the order of 1.5 degreesC within an estate, and 1.0 degreesC between estates. The results indicate that energy efficient designs can be achieved by manipulating surface albedo, sky view factor and total height to floor area ratio (building massing) while maximizing cross ventilation. (C) 2004 Elsevier B.V. All rights reserved.