Formaldehyde is a naturally occurring biological compound that is present in tissues, cells, and bodily fluids. It is also a potent nasal irritant, a cytotoxicant at high doses, and a nasal carcinogen in rats exposed to high airborne concentrations. The normal endogenous concentration of formaldehyde in the blood is approximately 0.1 mM in rats, monkeys, and humans, and it is 2- to 4-fold higher in the liver and nasal mucosa of the rat. Inhaled formaldehyde enters the one-carbon pool, and the carbon atom is rapidly incorporated into macromolecules throughout the body. Oxidation to formate catalyzed by glutathione-dependent and -independent dehydrogenases in nasal tissues is a major route of detoxication and generally precedes incorporation. The possibility that inhaled formaldehyde might induce various forms of distant-site toxicity has been proposed, but no convincing evidence for such toxicity has been obtained in experimental studies. This review summarizes the biological evidence that pertains to the issue of leukemia induction by formaldehyde, which includes: (1) the failure of inhaled formaldehyde to increase the formaldehyde concentration in the blood of rats, monkeys, or humans exposed to concentrations of 14.4, 6, or 1.9 ppm, respectively; (2) the lack of detectable protein adducts or DNA-protein cross-links (DPX) in the bone marrow of normal rats exposed to [3H]- and [14C]formaldehyde at concentrations as high as 15 ppm; (3) the lack of detectable protein adducts or DPX in the bone marrow of glutathione-depleted (metabolically inhibited) rats exposed to [3H]- and [14C]formaldehyde at concentrations as high as 10 ppm; (4) the lack of detectable DPX in the bone marrow of Rhesus monkeys exposed to [14C]formaldehyde at concentrations as high as 6 ppm; (5) the failure of formaldehyde to induce leukemia in any of seven long-term inhalation bioassays in rats, mice, or hamsters; and (6) the failure of formaldehyde to induce chromosomal aberrations in the bone marrow of rats exposed to airborne concentrations as high as 15 ppm or of mice injected intraperitoneally with formaldehyde at doses as high as 25 mg/kg. Biological evidence that might be regarded as supporting the possibility of leukemia induction by formaldehyde includes: (1) the detection of cytogenetic abnormalities in circulating lymphocytes in seven studies of human subjects exposed to ambient concentrations in the workplace (but not in seven other studies of human subjects or in rats exposed to 15 ppm); (2) the induction of leukemia in rats in a single questionable drinking water study with formaldehyde concentrations as high as 1.5 g/L (but not in three other drinking water studies with concentrations as high as 1.9 or 5 g/L); (3) the detection of chromosomal aberrations in the bone marrow of rats exposed to very low concentrations of formaldehyde (0.4 or 1.2 ppm) (but not in another study at concentrations as high as 15 ppm); and (4) an apparent increase in the fraction of protein-associated DNA (assumed to be due to DPX) in circulating lymphocytes of humans exposed to ambient concentrations in the workplace (1-3 ppm). This evidence is regarded as inconsequential for several reasons, including lack of reproducibility, inadequate reporting of experimental methods, inconsistency with other data, or insufficient analytical sensitivity, and therefore, it provides little justification for or against the possibility that inhaled formaldehyde may be a leukemogen. In contrast to these inconclusive findings, the abundance of negative evidence mentioned above is undisputed and strongly suggests that there is no delivery of inhaled formaldehyde to distant sites. Combined with the fact that formaldehyde naturally occurs throughout the body, and that multiple inhalation bioassays have not induced leukemia in animals, the negative findings provide convincing evidence that formaldehyde is not leukemogenic.