A laboratory animal model that permits the exposure of xenotransplanted human respiratory epithelium to formaldehyde was used to study the effects of formaldehyde alone or in combination with a carcinogenic metabolite of benzo(a)pyrene, benzo(a)pyrene diol epoxide. Epithelial cells obtained from autopsies of 20 full-term human fetuses or infants less than one year old were isolated, amplified in vitro, inoculated into rat tracheas from which the epithelial layer had been removed, and then transplanted subcutaneously into irradiated athymic nude mice. Four weeks after transplantation, the tracheal transplants were implanted with silastic devices containing 0, 0.5, 1, or 2 mg of powdered formaldehyde (Study 1). The tracheal transplants were examined histologically 2, 4, 8, or 16 weeks after transplantation. Before killing, all animals were injected with a single pulse of tritiated thymidine. A maximum effect was visible two weeks after exposure; 2 mg of formaldehyde produced numerous areas of epithelial erosion and inflammation. All doses produced areas of hyperplastic epithelium and areas of atrophic epithelium. The labeling indices showed dose dependence between two and four weeks after the initiation of exposure. These studies show that low doses of formaldehyde can elicit a proliferative response in human infant tracheobronchial epithelium that is not preceded by a massive toxic effect. Similar studies using xenotransplanted human adult nasal respiratory epithelium (Study 2) showed a response pattern similar to that of Study 1. In Study 3, using cells from 11 human infants, formaldehyde applied simultaneously or sequentially with benzo(a)pyrene diol epoxide did not induce epithelial alterations different from those observed with formaldehyde alone. This indicated that, under the doses and exposure conditions used, it was not possible to observe any cocarcinogenic or promoting effects of formaldehyde on the human infant tracheobronchial epithelium.