The pollution of polyethylene teraphtalate (PET) is in huge amounts due to the most widely usage as a packaging material in several industries. Regional pumice has several desirable characteristics such as porous structure, low-cost and light-weight. Considering the requirements approved by the Ministry of Public Works on isolation, composite insulation material consisting of PET and pumice was studied. Sheets of composites differing both in particle size of pumice and composition of polymer were produced by hot-molding technique. Characterization of new composite material was achieved by measuring its weight, density, flammability, endurance against both to common acids and bases, and to a force applied, heat insulation and water adsorption capacity. The results of the study showed that produced composite material is an alternative building material due to its desirable characteristics; low weight, capability of low heat conduction.