A computational study of chemical reactions occurring in the exhaust system of natural gas engines has been conducted, emphasizing the formation and destruction of formaldehyde. The modeling was based on a detailed reaction mechanism, developed for describing oxidation of C1-C2 hydrocarbons and formaldehyde. The mechanism was validated against data from laboratory flow reactors and from the exhaust system of a full-scale gas engine. A parametric study of the exhaust system chemistry was performed, investigating the effect of temperature, stoichiometry, pressure, and exhaust gas composition. The results indicate a complex interaction between unburned hydrocarbons (UHC), formaldehyde, and nitrogen oxides. Above 850 K, partial oxidation of unburned hydrocarbons may occur, resulting in net formation or net destruction of CH2O depending on the unburned hydrocarbons/CH2O ratio and the reaction conditions. At the typical unburned hydrocarbons/CH2O ratio of 1.0-1.5% for gas engines, net formaldehyde formation may occur in the exhaust system if temperatures above 850 K are reached.