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Shelter-building behavior by caterpillars provides a mechanism of defense against predators, microenvironment enhancement, and in some cases nutritional benefits. This study provides a detailed description of the life cycle and shelter-building process of caterpillars, and identifies constraints and factors influencing this adaptive behavior in Lepidomys n. sp. near proclea Druce (Pyralidae: Chrysauginae), a tropical dry forest pyralid. Five macroscopic larval instars were detected during the life cycle, and activities performed during shelter-building were categorized and timed. Caterpillar predators were identified, and 20% of all collected larvae died due to attack by parasitoid wasps. Shelter-building behavior was found to be constrained by the ontogenetic stage of caterpillars and influenced by leaf size of the host plant, Piper stipulaceum Opiz (Piperales: Piperaceae). A similar pattern of shelter-building behavior exhibited by Tosale n. sp. near cuprealis larvae that coexisted in the same host plant is also described. Larvae of the second species were significantly less abundant than those of Lepidomys and hatched one month later in the rainy season, which could indicate some competitive interactions between these two pyralid species.