Formaldehyde, a widely used industrial chemical to which humans are ubiquitously exposed, presented cause for concern when it was demonstrated to be carcinogenic in laboratory animals. Risk assessment protocols subsequently applied to formaldehyde are of questionable validity in light of the results of recent mechanistic investigations of biological responses to formaldehyde. Further, the hazard of ingested formaldehyde is not addressed in current assessment protocols. This paper addresses the potential human health risks accompanying low-level exposure to formaldehyde as a contaminant in drinking water. In this exposure scenario, noncarcinogenic risk from inhalation of formaldehyde from drinking water is evaluated through knowledge of the metabolism and biological effects of formaldehyde exposure. Noncarcinogenic risk from ingestion of formaldehyde in drinking water is evaluated from the perspective gained by comparison with dietary sources of formaldehyde. Carcinogenic risk to humans is evaluated in light of recent investigations into the mechanisms underlying biological responses to formaldehyde exposure. Finally, based on a comparison of ingestion of formaldehyde in drinking water with ingestion of naturally occurring formaldehyde in foods, a comparative hazard approach to form-aldehyde regulation is offered as a supplement to the rigid evaluation protocols currently used.