Lepidopterism, an irritant contact dermatitis caused by direct or airborne contact with the urticating hairs (setae) from Lepidoptera caterpillars, is a public health problem of increasing significance. Recent outbreaks of the oak processionary caterpillar (Thaumetopoea processionea) have reached epidemic proportions causing serious health and economical damage that will be of more concern in the future because global warming is favoring their survival. Today, medical treatments are limited to relieving symptoms since an effective therapy is lacking. Although the source is obvious many aspects of what exactly cause the symptoms is yet to be elucidated. Here, we used a refined method to extract venom components from the setae and identified the venom components by performing high-quality de novo transcriptomics combined with in-depth venom proteomics. Further, to investigate and reveal the mode of action of the venom, we performed an electrophysiological screening of a library of membrane proteins important for pain and itch. We identified over 200 venom components and grouped them into 25 toxin families that may be responsible for the inflammatory and allergic reactions such as allergens, unknown toxins, serine protease, serpin, trypsin inhibitors, serine carboxypeptidase, small molecules like putrescine, c-type lectin and products for the chitin biosynthesis. Next, we showed ex vivo evidence of the important role of TRPV1 in the signal-transduction pathway of T. processionea. Activation of TRPV1, a non-selective cation channel expressed in skin tissues, leads to cell depolarization, itch, pain and inflammatory responses. Together, we provide for the first time a proteotranscriptomic database and a pathophysiological basis for the symptomology of T. processionea envenomation. These intriguing discoveries pave the way to design more effective treatment options and might be useful for the treatment of other caterpillar envenomation in the world sharing a similar defense mechanism.