Puss Caterpillar

It has a name as ugly as it looks. Yup, that's a puss caterpillar for you. I've seen a couple of these around, but never knew what they were (besides caterpillars). They are also known as a Stinging Asp.
They are the caterpillar form of the flannel moth, which is a very very fuzzy yellow moth of average moth size - about an inch. Actually, a better word than "fuzzy" would be "hairy" because both the caterpillar and adult are so overabundantly hairy. They look like tribbles!
The larvae are about 1/2 - 3/4 of an inch long and tan to light yellow usually with a slightly darker stripe down the middle. The easiest way to tell if you've identified right is to touch it because it has a layer of venomous stinging spines under the top layer of soft hair, but you really don't want to do that. While the sting is hardly ever a serious concern it travels to the lymph nodes then to the chest and can cause excruciating pain. The sting can cause a welt that looks much like an allergy shot reaction or right after a TB test before it sinks in.

Puss caterpillars are a southern thing, I can't find any record of it farther north than Missouri. They're fairly common in Texas as they like the pecan, persimmon, hackberry, and oak trees.

This is one to watch out for as it looks so innocently fuzzy people are much more willing to pick them up, even thinking it might not be a living being at all - only a piece of fuzz.