Objective With the changes in environment and climate in recent years, the dermatitis outbreaks, caused by poisonous eucleid caterpillars, has increased. This investigation aims to determine the cause of this disease and find out the risk factors and route of exposure. Methods A case study and an environmental survey were carried out among the villagers with symptoms, and the epidemiological characteristics of cases were described. A case-control study (2:1) was performed, and experts were invited to identify the species of caterpillars. Results The attack rate (AR) in the village was 71.70% (223/311), highest among villagers over 80 years of age and those under 9 years of age. The AR in the village was higher than those in other villages. In the village, the AR was higher in the northern part than in the southern part and higher in the western part than in the eastern part. The environmental survey showed that a large number of caterpillars bred on a Pterocarya stenoptera tree near the Furun River at the northwestern corner of the village, and the experts identified the caterpillars as poisonous eucleid caterpillars. The case-control study showed that the risk factors for dermatitis caused by poisonous eucleid caterpillars were walking past the tree (≥4 times/d) (OR=12.0, 95%CI:3.9-51.0), washing the body with river water (OR=10.0, 95%CI:1.5-448.0), washing vegetables and clothes with river water (OR=4.5, 95%CI:1.4-19.0), and swimming in the river (OR=6.6, 95%CI:1.5-62.0). Conclusion The outbreak of dermatitis was caused by poisonous eucleid caterpillars, whose poisonous hair might contact the human skin by moving with wind or contaminating water.