The toxicity of formaldehyde (FA) in batch assays, using volatile fatty acids (VFA) as co-substrate, and the continuous anaerobic treatment of wastewaters containing FA in upflow anaerobic sludge blanket (UASB) reactors was investigated. In batch studies, FA exerted a 50% methanogenic toxicity on VFA at concentrations of around 100 mg/l, 2.5 times lower than values reported with sucrose. Although at FA concentrations higher than 200 mg/l methanogenesis was completely inhibited, a partial recovery of the bacterial activity was observed after 250 h when the FA had been removed from the medium. The continuous anaerobic degradation of FA at concentrations up to 2 g/l, using 1.6 g/l of glucose as co-substrate,was studied in a UASB reactor. A stable and efficient operation was observed at organic loading rates (OLR) of 6.0 g COD/l.d and with a COD/FA ratio as low as 1.4. A synthetic substrate with the same characteristics as the effluents produced during fibreboard adhesives manufacturing (based on urea-FA), i.e. 0.95 g FA/I and 0.35 g urea/l, was treated in a UASB reactor. The applied OLR and nitrogen loading rate (NLR) were 3.45 g COD/l.d and 0.58 g N/l.d, respectively. COD removal efficiencies were maintained at 90-95%, FA and urea being completely degraded.