Building design concepts that focus on energy efficiency may conflict with those intended to provide excellent indoor environmental quality (IEQ). Careful selection of a heating, ventilating, and air-conditioning (HVAC) system, and low-emission interior finish materials, can result in win win designs that minimize tradeoffs between energy and IEQ. We demonstrated energy and IEQ benefits in four new relocatable classrooms (RCs) monitored in two climate regions of California for one year. We used a case-crossover experimental design to compare energy and IEQ characteristics of a hybrid HVAC system that provides continuous ventilation (indirect-direct evaporative cooler with high-efficiency hydronic gas heat) to a standard heat pump system. Additionally, we explored the IEQ benefits of measurement-based selection of interior finish materials with low emissions of health-relevant volatile organic compounds (VOCs) including formaldehyde. Monitored data were used to calibrate DOE-2 models that simulated California-wide energy saving potential of RCs employing energy efficient building components including the hybrid HVAC system. IEQ monitoring results from our field investigation indicated that VOC concentration reductions, typically 50% or more, were achieved through improved ventilation while simultaneously average cooling and heating energy costs were reduced by 50% and 30%, respectively. Incremental annual California-wide energy impacts from installation of hybrid HVAC systems in 4,000 new RCs were projected to be: 5,975 MWh of electricity savings; 23.8 MW winter and 13.1 MW summer peak electric load reduction; 1,025 MBtu natural gas consumption from switch to gas heating; 50,931 MBtu source energy reduction; and a combined school district annual operating cost reduction of $880,900.