Compression and Extension
Caterpillars do not breathe through a nose or mouth. Instead, they breathe through holes in the sides of their bodies called spiracles using the compression and extension of their tracheal system. They take oxygen into the lungs by compressing, or flexing, the sides of their bodies. Once the oxygen is ready to be expelled as carbon dioxide, the caterpillar extends, or relaxes, the sides of its body, forcing the carbon dioxide from the body.
The Breathing Process
The tracheal system, which controls the caterpillar's breathing, filters and carries oxygen to body parts inside the caterpillar. This system is found in the last three segments of a caterpillar's multisegmented body. Once oxygen is squeezed in, entering through the spiracles on the side of the caterpillar's body, it is delivered through microscopic tubes called tracheoles, which penetrate between cells and thus send oxygen directly to them. Once the cells use the oxygen, the leftover carbon dioxide is sent back through the same tubes and out through the spiracles when the caterpillar relaxes its body.
Theories/Speculation
Although it is agreed that caterpillars breathe through holes in the side of their bodies, it is still debated in the scientific community whether caterpillars actually have lungs or not. Some scientists argue that a body part called the tokus, the part of the body that contains the tracheal system, is actually the lung, while some argue that the air is delivered only through tubes directly to cells.
Misconceptions
One misconception about caterpillars and insects is that they do not breathe. Insect bodies, in fact, are efficient breathing machines. For example, their tracheal system transports oxygen to their cells 20,000 times faster than breathing systems such as the one that humans have, which delivers oxygen via blood. Due to this efficiency, caterpillars need breathe only a few times every few hours.
Warning
Oxygen is vital to keep caterpillars alive. Too much oxygen, however, will damage the caterpillar's DNA, proteins and lipids, all of which are essential to proper growth and maturity to the butterfly stage. Caterpillars continue to breathe through spiracles during hibernation in a cocoon, as well as when they mature into butterflies.