According to the International Agency for Research on Cancer classification, formaldehyde is a human carcinogen that targets the nasal cavity. In humans and rats, inhaled formaldehyde is primarily deposited in the nasal cavity mucosa, metabolized to the less toxic formic acid, and finally excreted into the urine or exhaled. Thus, formaldehyde-induced nasal carcinogenicity may be a direct effect of formaldehyde itself, although the underlying mechanisms remain unclear. With regard to cytotoxicity, degeneration and necrosis of nasal respiratory cells occur in rats after short exposure to formaldehyde. Cell proliferation is increased in the damaged cells, suggesting its critical roles both in the early stages and throughout the entire process of nasal carcinogenicity. Hyperplasia, squamous metaplasia, and dysplasia of the damaged epithelium frequently appear as morphological precursor lesions. With regard to genotoxicity, in addition to DNA-protein crosslinks, oxidative DNA damage also occurs in the exposed nasal mucosal cells. Sustained exposure to formaldehyde may cause nasal carcinogenicity through cytotoxicity and auxiliary genotoxicity. In this review, we discuss adverse outcome pathways through which cytotoxicity can lead to carcinogenicity and the development of integrated approaches for testing and assessment for nongenotoxic carcinogens.