Most wasps are social creatures that build colonies to breed and raise their young. Colonies are housed in underground sites, attached to outside structures, or built to hang from branches and other overhanging areas. Yellowjackets, hornets and paper wasps construct nests consisting of a paper substance made by the wasps.
Unless built underground, a wasp nest is easily recognized. External nests built by yellowjackets, hornets and paper wasps are usually balloon or umbrella-shaped with an entrance/exit hole at the bottom. Inside the nest are stacked combs that contain cells for the queen to lay her eggs in. These are surrounded by a protective layer of a papery substance constructed and added on by worker wasps.
Other wasps build their nests underground. Some yellowjackets move into ground cavities or dig out a hole and construct a protected nest, while mud daubers use soil to build up a nest against a structure like the side of a house. The nests of paper wasps are often found on the inside of walls or in attics and garages, where they use house materials like wood, insulation and wallpaper for construction. Wasps tend to build their nests in quiet, obscured places, but this can still pose a problem if they settle on a location close to human activity.
Most wasps use wood fiber to create the papery substance found on the outside of nests. According to the University of Wisconsin, worker wasps do this by chewing wood particles and mixing them with their saliva to create a sticky pulp (see references 1). Afterward, the wasps use their mandibles and front legs to spread the new paste onto the outside of the nest, layering the paper for extra protection. The papery substance is enough to protect their young from most predators and exposure to the elements. Wasps usually continue to build onto the layers or will expand the nest if needed.
Wasps will only inhabit a nest for a single season, spanning from early spring to late summer or early autumn. A colony will die out once the weather turns too cold (wasps have difficulty flying in temperatures under 50 degrees Fahrenheit) and food sources are no longer available. Once a colony has died out, the nest will not be used again by others.