Abstract. The interactive effects of macronutrient balance [protein (P) : carbohydrate (C) ratio] and dietary dilution by cellulose on nutritional regulation and performance were investigated in the generalist caterpillar Spodoptera littoralis (Boisduval). Caterpillars were reared through the final stadium on one of 20 foods varying factorially in macronutrient content (P + C%: 42, 33.6. 25.2 or 16.8%) and P : C ratio (5 : 1, 2 : 1, 1 : 1, 1 : 2 or 1 : 5). The animals compensate by eating more of diluted foods, but suffer reduced nutrient intake in proportion to the degree of dilution. Increase in food intake with dilution is greater on balanced than imbalanced foods and this is reflected in greater reduction of dry pupal mass with dilution in the latter. Whereas dilution results in a reduction in the amount of whichever macronutrient is in excess in the food, by contrast, the ability to compensate for the deficient macronutrient in the food is unaffected by nutrient imbalance. Excess protein intake due to nutritional imbalance (diets with high P : C ratios) results in a regulatory decrease in the efficiency of retention of ingested nitrogen relative to restricted protein intake on oppositely imbalanced foods (low P : C ratios). By contrast, decreased protein intake due to dietary dilution is associated with a non-regulatory reduction in the efficiency of retention, irrespective of P : C ratio. Dilution is similarly associated with reduced utilization efficiency of ingested carbohydrate. The ecological implications of these results are discussed.