The 1980 report that inhaled formaldehyde induced nasal squamous cell carcinomas in rats had a significant societal impact and resulted in extensive research in the fields of rodent nasal pathology and human cancer risk assessment. This article presents an overview of the evolution of these events. It is concluded that the nasal passages of humans and rats are fundamentally identical biological target organs. Nevertheless, in the case of human health risk assessment, minor differences between these species may be critically important. Special attention should be paid to interspecies differences in nasal dosimetry and local metabolism; thus, chemical toxicity data derived from rats require careful interpretation when used for human risk assessments. In the case of formaldehyde, it is recommended that low-concentration (< or = 2 ppm airborne exposure) extrapolation, where no tissue damage is observed, be uncoupled from the responses at high concentrations (> or = 6 ppm), where epithelial degeneration, regenerative cell replication, and inflammation appear to be essential driving forces in formaldehyde carcinogenesis. The presence of treatment-related nasal lesions in rats following exposure to chemicals should always be treated as an indication of a potential human health risk, whether exposure is by the inhalation, oral, or dermal route.