Bagworm

The bagworm (ミノムシ, Minomushi) is a common insect that first appeared in, then was absent to catch in , but reappeared in. It appears throughout autumn and winter, and can be shaken out of trees. Upon shaking, it dangles out of the tree for a few seconds before disappearing back into the tree. The tree can be shaken repeatedly if the bagworm is not immediately caught. In, Bagworms do not crawl back into the tree after being shaken, unless the player leaves the acre. Bagworms are quite common.

If a bagworm is released, the casing bounces to the floor and disappears.

In City Folk
Blathers will say this after taking the bagworm from you:

"In time, a bagworm transforms into a bagworm moth, eh wot? The bagworm's casing is really rather unfashionable, bordering on hideous. Ah, but by sticking wool threads into the bagworm's casing, you can make a little 100%-wool coat for it! Of course, that would be mad. And inside that wool coat would be a big moth, which no one needs..."

Once donated, bagworms can be found in the upper left corner of the insect room in the museum, hanging from a tree.

Further Information
Bagworms are the larvae of various species of moth that all build cacoons from environmental elements such as lichen, plant material, and sometimes silk. They measure from one to fifteen centimetres.

Bagworms can be found around the world- there are around 600 known species. The casing of the bagworm serves to protect and camoflage the larvae until it emerges as a moth.