Air monitoring in some cities and towns by the Institute of Geological and Nuclear Sciences found atmospheric concentrations of arsenic, a known carcinogen, were twice the upper guideline for human health.
Much of the country's timber is treated with copper, chromium and arsenic, although it does not have to be labeled as such when sold, The New Zealand Herald reported Sunday.
People burning treated timber in their homes were probably obtaining it as remnants from building construction, researchers said.
While the use of such timber is restricted or banned in many countries, New Zealand has the highest per-capita use of CCA timber in the world, the Herald said.
Burning treated wood is illegal but it could be hard for people to recognize whether wood had been treated, Perry Davy of the research institute GNS Science said.