A caterpillar represents potential – the ability to create positive change. If you dream about a caterpillar, it may be a sign that you have hidden abilities that you can develop.
A dream about a caterpillar may be a message that you need to change in order to achieve a goal or to move on to the next phase in your life.
If someone crushes a caterpillar in your dream, or if you see a bird or other animal eating a caterpillar, it is a sign that you feel that you are not being allowed to develop your talents or abilities.
If you crush or eat the caterpillar yourself, you are denying your own talents.
Dreaming that you see a caterpillar turning into a butterfly means that are going through an important change in your life.