Formaldehyde inhalation at 6 ppm and above causes nasal squamous cell carcinoma (SCC) in F344 rats. The human health implications of this effect are of significant interest since human exposure to environmental formaldehyde is widespread, though at lower concentrations than those that cause cancer in rats. In this article, which is part of a larger effort to predict the human cancer risks of inhaled formaldehyde, we describe biologically motivated quantitative modeling of the exposure-tumor response continuum in the rat. An anatomically realistic, three-dimensional fluid dynamics model of the F344 rat nasal airways was used to predict site-specific flux of formaldehyde from inhaled air into tissue, since both SCC and preneoplastic lesions develop in a characteristic site-specific pattern. Flux into tissue was used as a dose metric for two modes of action, direct mutagenicity and cytolethality-regenerative cellular proliferation (CRCP), which in turn were linked to key parameters of a two-stage clonal growth model. The direct mutagenicity mode of action was represented by a low dose linear dose-response model of DNA-protein cross-link (DPX) formation. An empirical J-shaped dose-response model and a threshold model fit to the empirical data were used for CRCP. In the clonal growth model, the probability of mutation per cell generation was a function of the tissue concentration of DPX while the rate of cell division was calculated from the CRCP data. Maximum likelihood methods were used to estimate parameter values. Survivor (a nontumor outcome) and tumor data for controls from the National Toxicology Program database and from two formaldehyde inhalation bioassays were used for likelihood calculations. The J-shaped dose-response for CRCP provided a better description of the SCC data than did the threshold model. Sensitivity analyses indicated that the rodent tumor response is due to the CRCP mode of action, with the directly mutagenic pathway having little, if any, influence. When evaluated in light of modeling and database uncertainties, particularly the specification of the clonal growth model and the dose-response data for CRCP, this work provides suggestive though not definitive evidence for a J-shaped dose-response for formaldehyde-mediated nasal SCC in the F344 rat.