Insect body color polyphenisms enhance survival by producing crypsis in diverse backgrounds. While color polyphenisms are often indirectly induced by temperature, rearing density, or diet, insects can benefit from immediate crypsis if they evolve polyphenisms directly induced by exposure to the background color, hence immediately deriving protection from predation. Here, we examine such a directly induced color polyphenism in caterpillars of the geometrid peppered moth (Biston betularia). This larval color polyphenism is unrelated to the genetic polymorphism for melanic phenotypes in adult moths. B. betularia caterpillars are generalist feeders and develop body colors that closely match the brown or green twigs of their host plant. We expand on previous studies examining the proximal cues that stimulate color development. Under controlled rearing conditions, we manipulated diets and background reflectance, using both natural and artificial twigs, and show that visual experience has a much stronger effect than does diet in promoting precise color matching. Their induced body color was not a simple response to reflectance or light intensity but instead specifically matched the wavelength of light to which they were exposed. We also show that the potential to change color is retained until the final (sixth) larval instar. Given their broad host range, this directly induced color polyphenism likely provides the caterpillars with strong protection from bird predation.