Wood-based panels, which contain wood raw materials along with urea-formaldehyde (UF) or phenol-formaldehyde (PF) resins, can increase the indoor air concentration of formaldehyde. Formaldehyde can stimulate the upper respiratory mucosa and cross-linking reaction with cell proteins and DNA, and this can result in degeneration and necrosis of respiratory cells and damaged cell proliferation. Formaldehyde can induce health hazards such as nasal cancer, leukemia, and destruction of the reproductive system. Acetaldehyde dehydrogenase 5 (ADH5) in the body cooperates with Fanconi anaemia complementation group D2 (FANCD2) to quickly metabolize formaldehyde into formate and maintain the balance of endogenous formaldehyde. However, when both ADH5 and FANCD2 proteins have defects or mutations, damaged DNA repair failure and cell proliferation induce a variety of health diseases. The damage has been found in the upper respiratory area, not on distal body tissues such as liver, kidney, and bone marrow. Meanwhile epidemiological survey has not shown a positive correlation between formaldehyde and health hazards. It is recommended that the use of wood formaldehyde-based products should be reduced, and pathogenesis genes and damage repair mechanism should be studied systematically and deeply to develop gene drugs to remove excess formaldehyde and activate the damage gene repair mechanism in the future.