The oddball "leaf-purse" handiwork hydrangea leaftier moth (Olethreutes ferriferana, family Tortricidae) caterpillars are appearing on wild and cultivated hydrangeas. While these leaf structures may look very odd, the damage appears to cause little harm to the overall health of affected plants.
Individual caterpillars apply silk along the edges of newly expanding hydrangea leaves to cement or tie the leaves together. This creates a purse or envelope-like structure that surrounds both newly developing leaves and flowers.
The caterpillars then feed upon the leaves and flowers enveloped within these protective structures. The leaf structures created by this leaf-tier caterpillar tend to occur near the tips of plant stems and may be very obvious.
The tied leaves fail to fully expand and become dark green, wrinkled and gnarled; the structure may superficially resemble a plant gall. Opening the tied leaves will reveal the caterpillars housed within silk casings littered with dark green frass pellets.
The green semi-transparent caterpillars have shiny black head capsules and a black thoracic shield on top of the segment just behind the head. Currently, the caterpillars are very small.
The hydrangea leaftier moth only has one generation per season, so no new leaf-nests will appear. Pupal skins hanging out of the leaf structures indicate that the caterpillars have completed development. This usually occurs sometime in mid-to-early June in Ohio. Unfortunately, the current leaf structures will remain evident for the rest of the season.
Fortunately, the hydrangea leaftier appears to cause no harm to the overall health of its namesake host despite noticeably reworking normal leaf architecture. I've never seen the leaftier damage to wild or cultivated hydrangeas progress beyond the "oddity category." This is important because the leaf structures shield the caterpillars from direct exposure to a topical insecticide and there is no data on the efficacy of systemic insecticides.
On the other hand, if control is desired, populations can be reduced by squeezing the leaf structures to mash the leaftier caterpillars and pupae. However, before you put the squeeze on the leaf-purses, open a few to see if they are still occupied by the leaftier.
Leaf shelters constructed by this and other lepidopterous larvae play an important role in forest ecology by sheltering spiders. The spiders do not kill the original caterpillar tenant; however, they quickly take over the leaf-abodes once the lep-architects vacate the premises. Of course, the spiders should not be squeezed to death. They are beneficial predators that help to reduce insect pests.