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Here you see several stages of a phasmid moult.
The phasmid pictured is a larger instar of the Wülfing’s Stick Insect (Acrophylla wuelfingi).
In preparation for the upcoming event, the insect had during the night securely anchored itself in a suitable position.
In the very early morning hours the insect starts to inflate its body with air until the old skin splits open at the back, just behind the head. After that the insect will start to pull itself out of its old skin.
You can here easily see why phasmid need tall enclosures.
Due to the sheer length of its legs, the insect requires a lot of room to safely remove itself from its old skin and finally to hang down while hardening its soft new skin.
After its moult, a phasmid will usually eat its old skin to conserve valuable nutrients.
Never disturb an insect while it is moulting.