Indoor air quality (IAQ) plays a significant role in human health, and CO₂ has a long history of use as an IAQ indicator. Formaldehyde is one of the most ubiquitous indoor pollutants with proven adverse health effects. However, formaldehyde sensors are generally expensive, and they are not as accurate as CO₂ sensors. Thus, it is important to determine whether CO₂ could be used as an indicator for formaldehyde in engineering applications. In this study, indoor CO₂ and formaldehyde concentrations in actual Chinese residences under natural and mechanical ventilation were simulated by the Monte Carlo method. The Pearson correlation analyses were also performed. It was found that when emission rate of CO₂ is constant, CO₂ can act as a good indicator for formaldehyde when the formaldehyde emission rate (mg/h) divided by the emission rate of CO₂ (L/h) is smaller than 0.14 and positive correlation occurred between them. However, when the emission rate of CO₂ is varied, CO₂ may not be used as an indicator for formaldehyde despite their positive correlation.