The search for more effective methods and drugs to control parasites in fish farming is constant. Several studies have evaluated the effects of formalin in freshwater and marine fish and their parasites. Thus, this paper focuses on the major toxicological aspects of this chemotherapeutic including growth performance, histopathological damages, haematological and biochemical alterations, and antiparasitic efficacy. Acute toxicity (LC50—96 h) to formalin sulphate vary widely among fish species (0.1–640.0 mg/L) depending on various factors, as many fish species are sensitive to concentrations near those required for controlling and treating parasites. The toxicity of formalin on some metabolic processes leads to disturbances and imbalances to various physiological functions, particularly respiration and haematological and biochemical processes, due to histopathological damages in gills and haematopoietic organs. Formalin often affects the gills, liver, kidney and spleen, and in the gills provokes an increase in mucus and chloride cells, hyperplasia and/or hypertrophy of lamellae and epithelial lifting. Formalin used in therapeutic baths is extremely effective against various protozoan and monogenean species, which are parasites that infect gills, skin and/or fins of farmed freshwater and marine fish.