Volatilization volumes and health risks associated with indirect inhalation exposure to formaldehyde evaporated from water have not been investigated quantitatively. We experimentally investigated formaldehyde volatility, compared with chloroform volatility, predicted formaldehyde inhalation exposure concentrations in Japanese bathrooms, and then re-evaluated drinking water quality standards. Although the Henry's law constant of formaldehyde is 1/104 that of chloroform, with a 30-min exposure period, the formaldehyde non-equilibrium partition coefficient (K'd) was 1/500th the chloroform value because of formaldehyde's faster volatilization rate. We used this ratio to estimate the cumulative probability distribution of formaldehyde concentrations in bathroom air. For a formaldehyde concentration in water of ≤2.6 mg/L-water (WHO tolerable concentration), the probability that the incremental formaldehyde concentration due to volatilization would exceed 100 μg/m3-air (WHO indoor air quality guideline) was low. However, major sources of formaldehyde in indoor air are building materials and furniture. We therefore calculated the allowable concentration in water by allocating a small percentage of the indoor air guideline value to indirect inhalation exposure via volatilization from tap water. With an allocation factor of 20% (10%), the allowable concentration was 0.52 (0.26) mg/L-water. These concentrations are similar to the Health Canada guideline concentration but they are 3-6 times the Japanese water quality standard.