Recently, environmental architecture and sustainable construction has been ranked on top of the world’s interests. Making use of natural resources helps in reducing energy consumption and costs associated with the operation of buildings. The current architectural approaches and designs in Palestine are far away from environmental concepts, copying and simulating abroad approaches, without taking into account the culture, climate, and inhabitant's needs. On the contrast, vernacular architecture has achieved environmental concepts and has given suitable approaches and samples - without any need to simulate or copy - which come from people and land. This paper discusses how the Palestinian socio-cultural context shaped the residential vernacular architecture in Palestine, taking the old city of Nablus as a case-study. The research concept depends on analysing and trying to understand the effect of the socio-cultural context on vernacular architecture and trying to reach some rules or understandings of how it works in order to reach a modern environmental dwelling that is suitable to this concept. The research method goes through analysing study cases from the traditional architecture models and the Nablus city is selected as a case study. This analytical and qualitative method can lead to deep understanding for how to benefit from vernacular architecture in Palestine in finding the future environmental residential construction. One of the main findings of this research is to set general and special rules for building sustainable buildings in Palestine from the socio-cultural point view, in order to be a reference for designers, stakeholders, ministry of planning, and municipalities.