Gypsum is one of the most environmentally friendly binders and consequently its importance in building industry is increasing. New applications are being sought and new materials are being developed. A lightweight gypsum material foamed by waste stone dust was designed and tested. The amount of stone dust, a waste product formed during the cutting and polishing of decorative stones, is becoming serious problem in some countries. When the stone dust contains calcium carbonate, it can be used for gypsum foaming to produce cheap, environmentally attractive material. The physical and mechanical properties of lightweight gypsum-based materials with different amounts of stone dust were designed and tested. The material with largest amount of waste stone dust attained a bulk density under 600 kg/m 3 and compressive strength of 1.1 MPa, with a thermal conductivity of 0.117 W/m.K. These properties are sufficient for use of the material as a thermal insulating plaster, as the core of thermal insulating gypsum boards or in lightweight blocks for inner walls and partitions. Life cycle cost analyses was performed for the most favourable material and was compared with aerated autoclaved concrete, which is a common commercial product with similar properties.