Relative growth rates and nitrogen accumulation rates are lower for third-instar ~Uanduca sexta larvae on an artificial diet containing 65% water than on one containing 82% water, due to reduced efficiencies of conversion of digested food and digested nitrogen into larval biomass. Uric acid production is 2.@-2.5fold greater, and non-feeding respiration rates 16.0% higher in the larvae on the low-water diet. Food is the major source of water for the larvae, with metabolic water making only a minor contribution to water input. Faecal excretion is the major avenue of water loss, although a significant amount of water is also lost by transpiration. Larvae from the low-water diet retain and use a higher percentage of the water they gain than larvae from the high-water diet (49.4% vs 41.9%). They produce much drier faeces (48.1% water vs 77.3% water), and, because their tissues are less hydrated (81.3% water vs 88.1% water), they synthesize 70% more new, fully hydrated tissue from a given amount of water than larvae from the high-water diet. We discuss problems involved in the use of determinations of efficiency of conversion of digested food in establishing causal links between diet, growth, and metabolic maintenance costs, and also offer a definition of food processing costs that distinguishes them from metabolic costs attributable to other processes, such as food acquisition, growth, and moulting. We conclude that reduced growth and reduced efficiency of conversion of digested food on low-water diets are due to limitation in the amount of water available for the synthesis of new hydrated tissue, and not to the imposition of higher food processing costs.