We report here the pathological effects of a microsporidian isolate (Nosema sp.) from the lepidopteran teak defoliator Hyblaea puera Cramer. The spores were ovo-cylindrical and had a mean size of 5.1 × 2.8 μm. The midgut and fat body were the primary organs infected by the microsporidium. Subsequently, infection was observed in Malphigian tubules, tracheal epithelium and gonads. The sequence of infection observed was: midgut – fat body – tracheal membrane – Malpighian tubule – gonad. Infection of this microsporidium produced a marked negative effect on the growth and development of larvae. The weight of healthy larvae increased about 22 times from the 3rd instar to pupation while the increase was about 12 times in the infected larvae. Rearing experiments conducted in the laboratory revealed a high potential for horizontal transmission (>90%) of the microsporidium among the defoliator larvae developing together. A nearly equal degree of vertical transmission (88.7%) was also observed from the infected females to the progeny larvae. The observations reported here indicate the prospect of the microsporidium as a bio-control agent against the defoliator pest if exploited properly. Small subunit rRNA gene sequence analysis revealed that this microsporidium differed from Nosema bombycis of silk moth by only two nucleotides. The teak moth and the silk moth are not as closely related as these two parasites appear to be, implying the likelihood of host switching.