This caterpillar was found at Posada Amazonas Lodge in Tambopata, Peru. As far as I can tell, is the larva of a moth in the family Megalopygidae. This family is known for having hairy caterpillars with extremely painful stings. So despite its fluffiness, I do not recommend touching it! One of the guides here accidentally stepped on one as a child and said he had an entire leg swollen and a fever for two days.
The venom is a chemical of unknown origins, much research to be done with these guys.
- Spider is a Master of Subterfuge (neatorama.com)
- Spider That Builds Larger-Than-Life Decoy "Spiders" Discovered in Amazon (medicaldaily.com)
- Newly Discovered Spider Creates Dummy Version Of Itself (Complete With Eight Legs!)