My investigation into MDF began as we were struggling with finding a play kitchen set for my daughter. MDF, Medium Density Fiberboard, is an engineered wood product formed by breaking down hardwood or softwood residuals into wood fibers, combining it with wax and a resin binder, and forming panels by applying high temperature and pressure. Formaldehyde resins are commonly used to bind MDF together, and testing has consistently revealed that MDF products emit urea formaldehyde and other volatile organic compounds that pose health risks at sufficient concentrations, for at least several months after manufacture. The International Agency for Research on Cancer (IARC), classified formaldehyde as a "known human carcinogen" associated with nasal sinus cancer and nasopharyngeal cancer, and possibly with leukemia. The EPA classifies it as a "probable human carcinogen".
After calling several toy manufacturers,I learned that MDF can be marketed as wood, and even "solid wood", often leaving consumers unaware of the safety concern. After that I began looking around our home... prior to having children, we did acquire some cheaper furniture made of MDF.
I began investing and found that not all MDF is created the same. Our "cheap" MDF bookcases from mass-retailers probably aren't made with high standards. On the other hand, our pieces that came from IKEA have passed higher regulations.
I found that IKEA has strict rules concerning formaldehyde, and does not permit the use of paints and varnishes containing formaldehyde additives. For wooden products, the company applies the German E1 standard. Several company officials assured me that IKEA puts strict demands on suppliers which produce products with materials which contain formaldehyde. All materials have to comply with IKEA limits which are even stricter than legal limits. The IKEA formaldehyde demands means that the producers of material/production with formaldehyde, have to test the materials regularly and the production process has to be controlled and/or supervised by third part auditor. Apart from the third part auditing, their purchasing department visit the suppliers regularly and checks that the furniture producers fulfills their strict demands.
So the bottom line is that you should choose real wood furniture where possible. If that isn't an option, companies like IKEA, that use stricter standards than the US regulations, are better alternatives.