Exposure to sufficient amounts can cause death of animals within three weeks. It has been shown to be involved in cancer growth in humans and liver problems, immune system problems and reproduction problems in wildlife. There are two major aspects to this issue. According to the FDA and Tampax, tampons are generally made out of cotton, rayon or blends of the two. Rayon is made from wood or other fibrous materials, which are reduced to the fibers of cellulose.
Paper is made by the same process.
To purify the cellulose, the material is bleached. Tampons used to be bleached with chlorine and accordingly created traces of dioxin. The FDA says the tampon industry now no longer uses this method. The EPA regulates wood pulp producers to ensure that dioxin-free methods are used because dioxin is an environmental pollutant. This is where the confusion probably began.