It has been reported that the aphelinid wasp Eertmocerus mundus parasitizes all four nymphal instars of the sweet potato whitefly, Bemisia tabaci (Biotype B), with 3^rd instars being the preferred hosts. The parasitoid lays its egg on the leaf underneath the host nymph. First instars hatch and later penetrate the whitefly. Previous studies have shown that the initiation of parasitoid penetration induces the host to form a cellular capsule around the parasitoid. As described here, females never oviposited once the 4^th instar whitefly nymph had initiated adult development. First instar E. mundus larvae were observed under 2^nd, 3^rd and 4^th instar whitefly nymphs, however, penetration did not occur until the whitefly had reached the 4^th instar. The non-penetrating E. mundus larva almost always induced permanent developmental arrest in its 4^th instar whitefly host and also caused a reduction in whole body host ecdysteroid titers. Therefore, unless there is a peak in molting hormone titer in the area local to penetration, it appears that the induction of capsule formation is not due to an increase in ecdysteroid titer. As the capsule formed around the penetrating parasitoid, host epidermal cells multiplied and became cuboidal and columnar, and relatively thick layers of new cuticle were deposited within the developing capsule, particularly near its ventral opening. The newly formed host cuticle was thinner in the dorsal part of the capsule and appeared to be absent at its apex. These results provide new information regarding the timing and dynamics of parasitoid oviposition and egg hatch as related to larval penetration, parasitoid-induced changes in whitefly development, molting hormone titers and the process of capsule formation.