Stucco or portland cement plaster is widely used in North America as an exterior cladding material for the wood-frame walls. Recent computer-based numerical simulation studies at the National Research Council (NRC) Canada, Institute for Research in Construction (IRC) have indicated that low liquid diffusivity and high water vapor permeability of the stucco material can positively influence the overall moisture management capacity of wood-frame stucco walls. This paper presents the results from experimental and numerical modeling studies carried out at the NRC-IRC on the development of high performance stucco materials and its effect on the overall moisture management capability of wood-frame stucco walls. Liquid water and water vapor transmission properties of several commercial/conventional stucco materials and some newly formulated compositions were measured and compared under laboratory conditions. The experimental results suggest that by appropriate choice of the mix composition, addition of a proper hydrophobic admixture, and using aggregates with a hydrophobic coating, stucco material with lower liquid water diffusivity can be produced without reducing the water vapor permeability. The results from the numerical modeling study show newly developed high performance stucco materials can significantly improve the moisture management capability of wood-frame stucco walls.