Volicitin [N-(17-hydroxylinolenoyl)-L-glutamine] and N-linolenoyl-L-glutamine were originally identified in the regurgitant of Spodoptera exigua larvae. These fatty acid amino acid conjugates (FACs) are known to be elicitors that induce plants to release volatile compounds which in turn attract natural enemies of the larvae such as parasitic wasps. FAC concentrations are regulated by enzymatic biosynthesis and hydrolysis in the intestine of Lepidoptera larvae. It has been proposed that FAC metabolism activates glutamine synthetase and plays an important role in nitrogen metabolism in larvae. In this study, we identified candidate genes encoding a FACs hydrolase in Spodoptera litura using genomic information of various related lepidopteran species in which FACs hydrolases have been reported. We analyzed the importance of FAC hydrolysis on caterpillar performance with CRISPR/Cas9 knock outs. Larvae of strains with an inactive FACs hydrolase excreted FACs in their feces. They absorbed 30% less nitrogen from the diet compared to WT caterpillars resulting in a reduction of their body weight of up to 40% compared to wild type caterpillars. These results suggest that the hydrolysis of FACs is an important metabolism for insects and that FACs are important for larval growth.