Formaldehyde dehydrogenase (FDH) activity has been demonstrated biochemically in the olfactory and respiratory mucosae and in the liver of the rat, but the cellular localization of this enzyme has not been investigated. A histochemical procedure was developed to permit cellular localization of FDH. This allowed us to examine the relationship between distribution of FDH and formaldehyde-induced toxicity. Cold-processed glycol methacrylate embedded tissues were used to localize FDH activity in the rat respiratory tract, kidney, liver, and brain. Five- or ten-micrometer tissue sections were incubated in a reaction mixture containing formaldehyde (HCHO), glutathione (GSH), NAD+, nitroblue tetrazolium, pyrazole, and disulfiram. A blue formazan precipitate was formed at the site of FDH activity. Epithelial cell cytoplasm of both the respiratory and the olfactory mucosae of the nose stained for FDH, and olfactory sensory cell nuclei were also positive. Underlying Bowman's and seromucous glands were weakly positive. The lung had FDH activity located mainly in the Clara cells of the airways, with only diffuse weak activity in the lung parenchyma. Liver had activity in the cytoplasm of the hepatocytes, while in the kidney FDH was most prominent in the brush border of the P2 segment of the proximal tubules. Brain white matter stained strongly for FDH, while in gray matter only the neuropil exhibited weak activity. Corresponding tissue sections were stained for sulfhydryls; these sections indicated that GSH is likely to be present in all cells with FDH activity. For the respiratory tract these results demonstrate distinct differences between the location of FDH activity and previously reported nonspecific aldehyde dehydrogenase activity in the nose (M. S. Bogdanffy, H. W. Randall, and K. T. Morgan, 1986, Toxicol. Appl. Pharmacol. 82, 560-567). While high aldehyde dehydrogenase activities were found in tissues with low toxicities due to acetaldehyde exposure and vice versa, FDH activity was observed in tissues whether or not they exhibited a toxic response to inhaled HCHO. While not able to account for the localized toxicity of HCHO, the presence of FDH and glutathione in the epithelial layer of the nasal cavity presents a barrier to inhaled formaldehyde at low concentrations and may partially explain the observed nonlinearity of HCHO toxicity.