This paper provides morphological details for the larva and pupa of Setodes incerta (Walker) from Michigan, the first North American species in this genus for which this information is available. The male and female genitalis of this species are also illustrated, the latter for the first time. The larva of another species of Setodes from South Carolina, unidentifiable to species, is also briefly described and illustrated. Larvae of these two North American species are shown to be discordant with European larvae of Setodes in having a secondary division in the hind tibia, a character previously considered to be generic. Observations on aspects of the behaviour of the larva of S. incerta are presented: case-building, burrowing, adaptations to current, camoflage behaviour, and feeding. Arising from these is an overall interpretation of the function of the unusual morphological and behavioural characteristics of larvae of the genus Setodes.