Cells from the nasal respiratory epithelium were obtained at autopsy from young adults, amplified in primary cultures, and inoculated into de-epithelialized rat tracheas. These tracheas were sealed and transplanted subcutaneously into irradiated nude mice. Four weeks after this xenotransplantation procedure, when the tracheal lumina were covered by normal respiratory epithelium, the transplants were exposed to slow releasing silastic devices containing 0, 0.5 or 1 mg paraformaldehyde. Histological examination supplemented with autoradiographies revealed that the aldehyde produced both involutional changes such as erosion and atrophic epithelium and proliferative reactions such as hyperplastic-metaplastic lesions. These epithelial changes were characterized by a higher labeling index that in some focal areas reached values 10 to 20 times higher than normal. These effects were noted 2 weeks after exposure with FMD and in an attenuated form could also be seen at 8 weeks. This response pattern is very similar to that of the xenotransplanted human tracheobronchial epithelium and also of the rat nasal and tracheobronchial epithelia, in which formaldehyde proved to be an effective carcinogen.