Nowadays, the use of courtyard-centered architectural patterns as an effective strategy for responding to climatic conditions has attracted particular attention from architects; this importance is further amplified in historic buildings due to preservation constraints limiting changes to form and envelope. The present study evaluated the relative significance of orientation versus thermal envelope upgrades in a historic courtyard building located in Tehran's hot-arid climate. Energy simulations conducted in DesignBuilder with the jEPlus parametric tool for 24 orientation cases (15° increments) showed that the 180° orientation recorded the minimum annual energy consumption at 85,847 kWh, while the 105° orientation recorded the maximum at 92,023 kWh, corresponding to a 6.71% saving. Economic evaluation of envelope options indicated that double glazing, with a payback period of 2.2-2.9 years compared to 7.6–10.1 years for triple glazing, was the more cost-effective option; accordingly, triple glazing and polyurethane insulation were excluded from the design space. Multi-objective optimization of orientation and insulation using a genetic algorithm yielded a Pareto front of nine non-dominated solutions, in most of which the 0° orientation was preferred over 180°; this finding indicates that, contrary to the single-variable analysis, optimal orientation is not fixed independent of the envelope. Comparing the base case with the best Pareto solution (XPS insulation, 4 cm thickness) at fixed orientations revealed savings of 31.07% at 0° and 30.04% at 180°, substantially exceeding the effect of orientation alone. These results confirm the necessity of simultaneously evaluating orientation, thermal envelope, and economic feasibility in the climate-responsive design of historic buildings.