The exterior HAS to be dried in appropriately before any interior materials are installed. Then the HVAC has to be operative before decorative finish materials are installed.

You use sheetrock OR stucco, not one with the other. Or are you saying they are next to each other? In that case, stucco first since it is messier, and sheetrock afterward. But you really need to clarify your question.

Stucco where ? One is exterior and the other interior IMO so I don’t understand the question.

Sorry for the confusion. Stucco on the exterior, sheetrock on the interior.

@live_wire_oak why do you say that exterior has to be dried in appropriately before sheetrock is installed? Is doing lath sufficient or does it have to be stucco completely done before sheetrock is installed?

I am asking this question because I am having some trouble scheduling the crews in a way that I wanted to earlier i.e. exterior stucco first and then interior sheetrock next. Looking to see what can be done to reduce delays.

I would wait and get the stucco and the entire exterior done, so there is no chance of any leaking into the interior of the house, and then put the drywall up.

Is the house sealed and are the spaces conditioned and stabilized (HVAC)? If yes, then it doesn't matter. If not, get it sealed and conditioned. You can't install insulation in a wall that isn't weather sealed.

Proper sequences:

1. Frame inspection including weather in (lath, roof felted with final roofing material at least loaded for weight).

2. insulate

3. drywall

4. first coat of stucco (after drywall completely nailed or screwed off)

@live_wire_oak I am not GCing myself. But my GC had originally planned to do stucco first and then sheetrock, but at the last minute reversed the order. The reason given is that nailing sheetrock will result in vibration on the studs leading to cracks on the stucco (I guess @Jeffrey R. Grenz, General Contractor's reasoning is the same?). I wasn't clear on that so, I thought of asking my houzz community.

The windows, doors, lath and roof-shingles are done, so there is no water leak, but the house is not completely weather sealed since the the doors are not airtight. HVAC is not turned on either. In the meantime we have rain for a few days and the stucco work is postponed even more than planned. So I am even more concerned by that.

Tell the GC to use screws on the drywall; problem solved. Nobody uses nails these days, and if they do, they use a nail gun--no vibrations.

And, if the stucco is going to be that delicate and fragile, he needs to be fired. Seriously? Your home's exterior will crack from a little nailing? He's blowing smoke up your backside; otherwise he wouldn't have planned stucco before sheetrock in the first place, would he?

https://www.stuccomfgassoc.com/wp-content/uploads/2014/06/plastercouncil_tech4_crackr14.pdf