The building industry is a major contributor of CO2 emission. Wood construction is a good option for carbon storage among various construction alternatives. Considering the growing market of multi-story wooden building in Sweden, CLT (cross laminated timber) structure with an alternative insulation composite with PIR insulation and MgO board was proposed. In order to prove the applicability of this construction for moisture safety, the hygrothermal performance of the wall was measured in real life at HSB Living Lab (Gothenburg, Sweden) throughout 2019. Furthermore, a numerical model to analyse its performance by transient heat and moisture transfer analysis was created to predict the performance of the wall system. After the successful validation of the numerical model, a parameter study was carried out to investigate the moisture risk of the wall system in the case of extensive wetting of the CLT panel and in various areas in Sweden (Gothenburg, Stockholm, Lund, Karlstad and Lule). The study showed a low mould growth risk either in the test at the living lab or in the feasibility study. The development of the technology should further focus on the cost-effectiveness and design of all the construction details for the future market application.