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The use of lime as a binder in hemp–lime considerably increases the drying time of hemp–lime after casting. Furthermore, lime is a non-renewable mineral resource. As such, this paper explores the effectiveness of using an alternative non-mineral binder instead of lime to formulate a novel hemp–shive insulation. The moisture-dependent thermal conductivity, adsorption isotherm, vapour diffusion resistance factor, and in-built hygrothermal performance of four variants of a novel bio-based insulation were investigated. The hygrothermal performance of the novel hemp–shive insulation was compared with that of a previously developed novel hemp–lime insulation. No significant variation in thermal conductivity of hemp–shive insulations between the equilibrium moisture contents (EMC) at 0% and 50% relative humidity (RH) was observed, but there was a substantial increase in thermal conductivity hemp–shive insulations when the material reached the EMC at 98% RH. The average dry thermal conductivity values of hemp–shive and hemp–lime insulations were also similar. The adsorption isotherms of hemp–shive insulations were determined at 0%, 20%, 50%, 70%, 90%, and 98% relative humidity steps. At 98% RH, the moisture adsorption capacity of hemp–shive insulations was 4-to-5-times higher than that of hemp–lime insulation. Hemp–shive insulations' vapour diffusion resistance factor (µ value) was about double the µ value of hemp–lime insulation. Hemp–shive insulations exhibited 4-to-5-times higher water absorption resistance than that of hemp–lime insulation. Numerically determined porosity values of hemp–shive agree with the values of wood-based insulation materials of similar density. Finally, using all experimentally acquired data as inputs, dynamic whole-building hygrothermal simulations were carried out and the results show that novel hemp–shive insulation materials perform at a similar level to the hemp–lime insulation in terms of heating and cooling energy demand but require 45% less energy for humidification. However, the relative humidity inside the hemp–shive wall remains higher than 70%, which can potentially induce mould growth. [ABSTRACT FROM AUTHOR]