This lovely orange caterpillar is one of the types of “wooly bear” caterpillars, of which the orange and brown ones are best known. The adult is the Virginia Tiger Moth, a lovely white, fuzzy moth. (It might also be another type of Tiger Moth but I’m giving this my best shot.).
They are unspecific in their diet, and whenever I’ve found them they are on the ground or in the grass. This one was pretty large and happily grazing on weeds.
The picture was taken August 25, 2012, in Green Lane, Pennsylvania, USA.
For some general information on Tiger moths you can visit: