Lipocalins exhibit functional diversity, including roles in retinol transport, invertebrate cryptic coloration, and stress response. However, genome-wide identification and characterization of lipocalin in the insect lineage have not been thoroughly explored. Here, we found that a lineage-specific expansion of the lipocalin genes in Lepidoptera occurred in large part due to tandem duplication events and several lipocalin genes involving insect coloration were expanded more via tandem duplication in butterflies. A comparative analysis of conserved motifs showed both conservation and divergence of lepidopteran lipocalin family protein structures during evolution. We observe dynamic changes in tissue expression preference of paralogs in Bombyx mori, suggesting differential contribution of paralogs to specific organ functions during evolution. Subcellular localization experiments revealed that lipocalins localize to the cytoplasm, nuclear membrane, or nucleus in BmN cells. Moreover, several lipocalin genes exhibited divergent responses to abiotic and biotic stresses, and 1 lipocalin gene was upregulated by 300 fold in B. mori. These results suggest that lipocalins act as signaling components in defense responses by mediating crosstalk between abiotic and biotic stress responses. This study deepens our understanding of the comprehensive characteristics of lipocalins in insects.