The Caterpile Nest is a location in Xenoblade Chronicles. It is on the lower level of Tephra Cave, a short way along the Tephra Path and south of the Mag Mell Ruins. There are a number of Cute and Eater Caterpiles on the grass patch here, presumably the nest itself, as well as a Unique Monster - the Cellar Bugworm.
An alternative route can be taken to avoid encountering the Cellar Bugworm - a bridge accessible through a tunnel on the left wall as the nest is approached. However, to the right of the eastern side of the bridge is the Mining Patrichev, so either way the party must pass by a Unique Monster.