[5] Like most paper wasps Polistes erythrocephalus construct their nests by chewing plant and wood fibers with saliva to create a paper-maché-like material.

P. erythrocephalus in urban areas have been observed to build nests under the eaves of roofs, under the wood of basement floors, in barns/stables, under bridges, and in lofts.

Although this species is most concentrated in Costa Rica and Panama, it has also been observed in Nicaragua, Venezuela, Colombia, Ecuador, Peru, Bolivia, and Southern Brazil.

[1][2][13] In Costa Rica, P. erythrocephalus nests are specifically highly concentrated in Finca Taboga and on the Osa Peninsula.

The length of a colony cycle for P. erythrocephalus varies depending on if the particular group is located in a tropical or more temperate region.

[5] The founding phase begins in the spring and involves individual reproductive females (called foundresses) building new nests.

As workers emerge, they begin to assume colony tasks such as nest maintenance, foraging, and larva care.

While the workers may do much of the building and maintenance, queens with mature eggs in their ovaries demonstrate cell initiation behavior and are responsible for beginning the process.

During this time males wait on perches near nests in order to have the opportunity to mate with a virgin foundress.

[5] In P. erythrocephalus the termination of nest growth and start of brood decline occurs when the queen ceases laying eggs or disappears.

[7] As is common in many wasp species the queen of P. erythrocephalus nests has great influence over the behavior of the colony.

The presence of an active reproductive queen in P. erythrocephalus is a necessity for normal colony expansion and nest growth.

However, under normal conditions when a queen is removed the nest can continue to grow (at a reduced rate) if there are workers present.

While it is often thought that a colony begins to decline with the cessation of the queen, this removal is often accompanied with an absence of workers.

In nests of greater than 50 cells males begin to appear indicating that they are the progeny of the founding queen.

[10] As in many multifoundress wasp species, P. erythrocephalus foundresses compete viciously in order to become the dominant female.

Adults P. erythrocephalus demonstrated average resistance and died in two to three days when cut off from food and water.

[16] The most common symbiont found in P. erythrocephalus nests is Pachysomoides stupida, a type of parasitic ichneumon.

[10] Additionally, some Xenon species parasitize P. erythrocephalus adults, acting as permanent entomophagous endoparasites by dwelling in the abdomen.

[2] Polistes eythrocephalus is not commonly observed to tend or collect honeydew from aetalionids (treehoppers) or any other insect species.

However, in one study done in Peru researchers observed a single female P. erythrocephalus among an aggregation of Aetalion reticulatum (treehoppers).

Spiders of families such as Salticidae, Linyphiidae, Oonopidae, and Scytodidae have been observed to use the nests for brooding and resting webs.

They have long been considered responsible for feeding on and thus controlling the population of leaf-eating worms in tobacco fields in South America.

[10] They were especially important to the large plantations of the Colombian Tobacco Company (la Compañia Colombiana de Tabaco) from 1932-1936.

Bacillus thuringiensis however proved harmless to P. erythrocephalus as nest concentrations and working conditions remained completely unchanged.