Described herein is a wall assembly for use in walls of energy efficient residential or commercial buildings which can provide improved thermal resistance, moisture resistance and structural capacity. The wall assembly includes a frame assembly, an outer fiberboard, and a closed cell foam layer. The fiberboard is laminated with a lamination such as a non-perforated, non-woven polyolefin permeable membrane. The closed cell foam layer couples the frame assembly and the outer fiberboard. Also described herein is a method of manufacturing the wall assembly.