The problem of defining the relationship between interior space and exterior envelope of a building has long been a challenging task in the field of architecture throughout its history. This research chronologically reviews some of the important turning points in various schools of thoughts concerning construction of exterior envelope, with focus on how they influenced and altered the formation of our interior environment. This research also stipulates on how technological advance in the late 20th century laid grounds for a new type of interior-exterior relations in architecture through creation of flexible and ambiguous boundary conditions. The focus of this qualitative research will be on contemporary works of Japanese architects Toyo Ito, SANAA, and related group of architects who address the issues of transparency, flexible interior layout, buffer zones, structural facade, and neutralized (homogeneous) space that produces spatial quality of non-linear, non-hierarchical, and de-materialized space as a direct alternative to modern principles of space making.