High angular resolution H_2CO 218 GHz line observations have been carried out toward the low-mass protostars IRAS 16293-2422 and L1448-C using the Owens Valley Millimeter Array at ~2 resolution. Simultaneous 1.37 mm continuum data reveal extended emission which is compared with that predicted by model envelopes constrained from single-dish data. For L1448-C the model density structure works well down to the 400 AU scale to which the interferometer is sensitive. For IRAS 16293-2422 , a known proto-binary object, the interferometer observations indicate that the binary has cleared much of the material in the inner part of the envelope, out to the binary separation of ~800 AU. For both sources there is excess unresolved compact emission centered on the sources, most likely due to accretion disks ≾200 AU in size with masses of ≳0.02 M_☉ (L1448-C) and ≳0.1 M_☉ (IRAS 16293-2422). The H_2CO data for both sources are dominated by emission from gas close to the positions of the continuum peaks. The morphology and velocity structure of the H_2CO array data have been used to investigate whether the abundance enhancements inferred from single-dish modelling are due to thermal evaporation of ices or due to liberation of the ice mantles by shocks in the inner envelope. For IRAS 16293-2422 the H_2CO interferometer observations indicate the presence of rotation roughly perpendicular to the large scale CO outflow. The H_2CO distribution differs from that of C^(18)O, with C^(18)O emission peaking near MM1 and H_2CO stronger near MM2. For L1448-C, the region of enhanced H_2CO emission extends over a much larger scale >1 than the radius of 50-100 K (0.6-0.15) where thermal evaporation can occur. The red-blue asymmetry of the emission is consistent with the outflow; however the velocities are significantly lower. The H_2CO 3_(22)-2_(21)/3_(03)-2_(02) flux ratio derived from the interferometer data is significantly higher than that found from single-dish observations for both objects, suggesting that the compact emission arises from warmer gas. Detailed radiative transfer modeling shows, however, that the ratio is affected by abundance gradients and optical depth in the 3_(03)-2_(02) line. It is concluded that a constant H_2CO abundance throughout the envelope cannot fit the interferometer data of the two H_2CO lines simultaneously on the longest and shortest baselines. A scenario in which the H_2CO abundance drops in the cold dense part of the envelope where CO is frozen out but is undepleted in the outermost region provides good fits to the single-dish and interferometer data on short baselines for both sources. Emission on the longer baselines is best reproduced if the H_2CO abundance is increased by about an order of magnitude from ~ 10^(-10) to ~ 10^(-9) in the inner parts of the envelope due to thermal evaporation when the temperature exceeds ~50 K. The presence of additional H_2CO abundance jumps in the innermost hot core region or in the disk cannot be firmly established, however, with the present sensitivity and resolution. Other scenarios, including weak outflow-envelope interactions and photon heating of the envelope, are discussed and predictions for future generation interferometers are presented, illustrating their potential in distinguishing these competing scenarios.