This study investigated the impact of thermally improved spacers (TISs) on the condensation prevention and energy saving performances of residential windows. The temperature factor and total U-value were analyzed with the two-box model, by which the TISs are represented with the equivalent thermal conductivity. The results showed that the TISs could increase the temperature factor by up to 12%, and this significantly improved the condensation prevention performance. In addition, it was proved that the TIS enables the prevention of the condensation at an outdoor temperature that is 4.2 • C to 15.7 • C lower compared with the conventional spacer. Also, it was shown that the TISs reduce the total U-value by an amount from 0.07 W/m 2 K to 0.12 W/m 2 K, implying that the heat loss through the window is reduced by a rate from 2.8% to 8.2%. In addition, the results of the whole building energy simulation proved that the TISs can reduce the annual heating-energy consumption by a rate from 3.0% to 6.3%. The results were then used for the development of monographs to determine the equivalent thermal conductivity of a window spacer that can meet the performance criteria in terms of condensation prevention and energy saving.