Workers are about 5/8 inch long, and queens are up to 3/4 to 1 inch long; all are ivory and black striped and look like large yellowjackets. The nest is built from wood fiber combined with saliva to form a gray paper "carton" filled with paper combs that can be as large as a basketball. Baldfaced hornets tend to build their colonies on the sides of buildings or in trees or shrubs. They are often found high up in vegetation, but sometimes they are found in shrubs only 5 or 6 feet off the ground.

Queen baldfaced hornets overwinter in protected locations, such as beneath logs, and initiate their annual colonies in springtime. Once the queen has constructed a small comb and envelope, she lays eggs, cares for the larvae, and awaits their emergence as adults. These workers take over for the queen all the duties of nest enlargement, foraging, and larval care. The queen then only lays eggs, and the hive can grow to 100 to 400 workers at its peak. New queens are produced in larger cells in late summer, along with male wasps. Mating then occurs as the colony declines, and inseminated queens seek overwintering sites while workers continue to feed themselves but stop caring for the hive. Leftover hives are not reused the following year. Eventually all workers die off with cold weather. Baldfaced hornets are predators but not scavengers, and they are rarely a problem at concession stands or outdoor activities involving food.

Baldfaced hornet nests are often constructed in inconvenient places, such as doorways, courtyards, inside playground shrubs, and other places where human activity is frequent. Other times the nest may be high up in a tree, or otherwise out of the way. They cause no structural damage but can be a significant stinging hazard, especially if the nest is close to human activity. If wasps are only seen foraging, not nesting, in an area with people, every effort should be made to minimize human contact with the wasps rather than targeting individual wasps with insecticides.