They are Dogwood Sawflies. Not a true caterpillar but the larvae of a type of wasp. A dogwood in my yard that died after a pine limb fell on it had these. I contacted the NCSU Extension and they sent me some info. Unfortunately if you see them at this stage it's sort of too late. You need to try and eradicate before they hatch. Do a search there is plenty of info out there.These things have suddenly appeared on my red twig dogwood bushes and are eating the leaves quickly. What are they? Will spinosad sprayed on there kill them and keep them away? (I have some of that on hand) View attachment 797384
So maybe that explains the toxins from touching them. Again, not sure if it's true, just what I've always been told.The larvae of a type of wasp