Clothes contain a wide range of chemicals, some of them potentially hazardous. Recently, there has been a growing interest in eco-friendly clothing, including the use of organic cotton. However, the process of eco-friendly fabric production does not exclude the use of toxic substances, such as formaldehyde, a known human carcinogen. The present investigation was aimed at determining the presence of formaldehyde in eco-friendly and conventional clothing of pregnant women, babies, and toddlers from the Catalan (Spain) market. The potential effects of washing were also investigated by comparing the reduction of formaldehyde in unwashed and washed clothing. Formaldehyde was detected in 20% of samples, with a mean level of 8.96 mg/kg. Formaldehyde levels were surprisingly higher in eco-friendly than in regular garments (10.4 vs. 8.23 mg/kg). However, these differences were only significant (p < 0.05) for bras (11.6 vs. 7.46 mg/kg) and panties (27.1 vs. 6.38 mg/kg) of pregnant women. Dermal exposure and health risks were assessed for three vulnerable population groups: pregnant women, babies, and toddlers. In general, exposure was higher in babies (up to 1.11×10−3 mg/kg/day) than in other groups (2.58×10−4 and 4.50×10−3 mg/kg/day in pregnant women and toddlers, respectively). However, both non-carcinogenic and carcinogenic risks were below the safety limits (<1 and < 10−5, respectively) according to national regulations. Notwithstanding, although formaldehyde levels were below the legal limits (< 75 mg/kg) and health risks were within acceptable ranges, clothing may contain other toxic substances in addition to formaldehyde, thus increasing the risks. Finally, since no formaldehyde was detected in washed textile samples, a safe and simple practice for the consumers is to wash clothing before the first use.