In this paper it is shown that compacted wheat straw block is a cost effective building material in China. Wheat straw is renewable resource and ecological material, when used as building material; it is less energy and material consumption. The compacted wheat straw block has a small thermal diffusivity and good fire resistance. The hydraulic properties will guarantee a comfortable humidity of in door air, and protect the material from rot, and ensure the durability of the construction. The mechanical properties will also increase the structure safety. It is absolutely a cost effective building material.