During the thriving housing market between 2004 to 2007 a shortage of drywall led contractors to acquire drywall from China. It was later found to be contaminated with waste materials which, especially in humid areas, can release fumes causing damage to surrounding structures and are the cause of many health related problems.

It is estimated that more than 100,000 U.S. homes have Chinese drywall within their structures. The drywall fumes cause copper and other metals to corrode and oxidize. The corrosion of metals interferes with home air conditioning and heating, internal electrical wiring, plumbing, common household appliances, and electronics. There is a risk of fire associated with the deterioration of wiring within smoke detection systems. When removed from an environment, microscopic pieces of the drywall are loosened into the air and find their way into lungs, similar to asbestos materials. Some of the health problems related to Chinese drywall are respiratory problems, typically bleeding noses, irritated sinuses and eyes, dry throat, incessant coughing, an onset of asthma, and sleep apnea.

Several class action lawsuits are currently underway concerning Chinese drywall, though not all drywall from China is tainted. Many state health departments are looking into the situation to determine whether there is an actual health risk with the drywall. The U.S. EPA in May of 2009 determined that the imported drywall in question does contain among other substances sulfides, formaldehyde, various metals, and water soluble chlorides.