It's urea formaldehyde foam insulation and it was installed in the 1970's in the US.
It caused a real uproar up here in Canada because the Canadian government wanted people to upgrade their insulation for greater energy efficiency and offered a rebate program on the cost of re-insulating. Lots of people opted to use this new urea formaldehyde foam which was injected through a hole drilled in the exterior wall, and the hole then plugged.
The problem was that lots of people with UFFI foam insulation in their walls started complaining about nausea, headaches, fatigue, respiratory difficulties and even nose bleeds. However, when these people's houses were tested, the formaldehyde concentration in the air was found to be well within Health Canada's exposure standards. It was found that you would be exposed to much higher levels of formaldehyde if you had a new carpet installed or sat in the smoking section of a cafeteria.
UFFI foam insulation was banned in Canada in 1980, but it was never banned in Europe and is still used there today. In fact, in Europe, UFFI foam insulation is considered one of the better products to retro-insulate your home with.
Google urea formaledehyde foam insulation
Alternatively, click on the Google "Images" link and search for pictures of other urea formaldehyde foam insulation to confirm it looks just like the stuff in your wall.