Papular urticaria is a common and often annoying disorder manifested by chronic or recurrent papules caused by a hypersensitivity reaction to the bites of mosquitoes, fleas, bedbugs, and other insects. Individual papules may surround a wheal and display a central punctum. 
See When Bugs Feast: What's Causing that Itch?, a Critical Images slideshow, to help identify various skin reactions, recognize potential comorbidities, and select treatment options.
Although the overall incidence rate is unknown, papular urticaria tends to be evident during spring and summer months; in some climates, such as that in San Francisco, California, this condition may affect children throughout the year. In addition, despite no known racial or sex predisposition, certain ethnic groups (specifically Asians) may be more predisposed to more intense reactions, and a small Nigerian study reported a slight female predominance for skin diseases such as papular urticaria and atopic dermatitis.  Papular urticaria was evident in 2.24% of 5250 first-time pediatric patients, with 6029 diagnoses in one pediatric dermatology service survey.  A survey of skin disorders in more than a 1000 new pediatric patients at a hospital in Bangalore, India found insect bite reactions and papular urticaria in 5.1%  A Nigerian survey of 491 pediatric dermatoses in 441 patients found papular urticaria in 6.7% of them. 
This eruption is primarily self-limited, and children eventually outgrow this disease, probably through desensitization after multiple arthropod exposures. [6, 7] However, adults can be affected, albeit at a much lower rate.
See also the following:
Etiology and Pathophysiology
Papular urticaria is generally regarded to be the result of a hypersensitivity or id reaction to bites from insects,  such as mosquitoes, gnats, fleas, [9, 10] mites, [11, 12] bedbugs, [13, 14] caterpillars,  and moths.  Varicella vaccines have also been implicated.  However, it is unusual to identify an actual culprit in any given patient. [17, 18] One specific mite causing it is Peymotes ventricosus, and it is also known as the “grain itch”, “barley itch”, “straw itch”, “hay itch”, “prairie itch”, “mattress itch”, and “cotton seed itch”, sometimes evident occupationally in farmers, bakers, dock workers, packers, and indoor workers. These mites are invisible to the naked eye. 
The histopathologic pattern in papular urticaria consists of mild subepidermal edema, extravasation of erythrocytes, interstitial eosinophils, and exocytosis of lymphocytes. These findings suggest a pathophysiologic process that is immunologically based. 
Morphologic and immunohistochemical evidence suggest that a type I hypersensitivity reaction plays a central role in the pathogenesis of papular urticaria. The reaction is thought to be caused by a hematogenously disseminated antigen deposited by an arthropod bite in a patient who is sensitive. This theory is supported by the fact that these lesions can and often do occur in areas away from the bites. The putative antigen is unknown.
The presence of immunoglobulin and complement deposits in the skin of some patients with papular urticaria suggests that the lesions may be due to a cutaneous vasculitis.  The deposits were most frequently seen in lesions within 24 hours of their development. The presence of granular deposits of Clq, C3, and immunoglobulin M (IgM) in superficial dermal blood vessel walls suggests that immune complexes (IgM aggregates) may be primarily involved in the pathogenesis, with complement activation initiated by Clq through the classic pathway. A T helper 2 (Th2) shift may be present, similar to what is observed in atopy. 
In a study of the specific pattern of flea antigen recognition by IgG subclass and IgE during the progression of papular urticaria caused by flea bite, variations in the antibody responses of both subclasses to flea antigens were identified.  Among these 25 patients, those with 2-5 years of papular urticaria had more IgE bands than patients with shorter or longer durations of symptoms. Thus, the predominant specific antibody isotypes appear to vary according to the time elapsed from the onset of fleabite-induced papular urticaria.  The cellular immune response against whole-flea antigen in patients with papular urticaria by flea bites may be the result of an impaired dendritic cell population. 
Children, adult males, nonlocal inhabitants, and those belonging to urban or periurban areas may be more vulnerable to papular urticaria.  Patients usually report chronic or recurrent episodes of a papular eruption that tends to occur in groups or clusters associated with intense pruritus. The most common first appearance is of papules and urticarial plaques in clusters over exposed and covered parts of the body.
The eruption is characterized by crops of symmetrically distributed pruritic papules and papulovesicles. The lesions can also appear in an area localized to the site of insect bites, but they occur on any body part. The lesions tend to be grouped on exposed areas (see the image below), particularly the extensor surfaces of the extremities. Sometimes, a central hemorrhagic punctum may be evident with ecchymoses and brownish pigmentation persisting after resolution.  Scratching may produce erosions and ulcerations. Secondary impetigo or pyoderma is common. Having pets and the use of colognes were identified as predisposing factors for insect bite dermatitis in one large study, whereas atopy was not. 
When evaluating a patient with papular urticaria, the following conditions should also be considered:
True cellulitis 
The histopathologic differential diagnosis of papular urticaria includes other spongiotic dermatitides, pityriasis lichenoides et varioliformis acuta, the pruritic papular eruption of human immunodeficiency virus (HIV) disease, and papulonecrotic tuberculid. Papular urticaria with marked spongiosis and a dense inflammatory cell infiltrate cannot be reliably distinguished from arthropod bites on clinical and histopathologic grounds.
In a prospective study of papular urticaria that evaluated the histopathologic features of 30 affected patients, more than 50% of patients had mild acanthosis, mild spongiosis, exocytosis of lymphocytes, mild subepidermal edema, extravasation of erythrocytes, superficial and deep mixed inflammatory cell infiltrate of moderate density, and interstitial eosinophils.  Immunohistochemical analysis revealed abundant T lymphocytes (CD45RO, CD3) and macrophages (CD68). B lymphocytes (CD20) and dendritic antigen-presenting cells (S100) were not seen.  Direct immunofluorescence staining did not demonstrate immunoglobulin A (IgA), immunoglobulin G (IgG), IgM, C3, or fibrin.
The occasional overlapping in histologic pattern between papular urticaria exhibiting the histologic features of pseudolymphoma and a true lymphoma can cause problems. Persistent nodules may suggest the possibility of a lymphoma, not papular urticaria, and require a skin biopsy specimen.
Management and Prevention
The treatment of papular urticaria should be conservative and is symptomatic in most cases. Mild topical steroids and systemic antihistamines for relief of the itching that often accompanies this condition may be used. On occasion, papular urticaria may be severe enough to warrant the use of short-term systemic corticosteroids. If secondary impetigo occurs, topical or systemic antibiotics may be needed. Note that the use of insect repellents while the patient is outside and the use of flea and tick control on indoor pets are necessary when these individuals are being treated for papular urticaria.
Rigorous use of an effective insecticide may prevent insect bites and, accordingly, papular urticaria. Insecticides containing diethyltoluamide (DEET) are among the most beneficial. For safety purposes, topical insecticides used on infants and children should be in accordance with their age. DEET, picaridin, PMD (para-menthane-3,8-diol), and IR3535 are suitable for protection against arthropod bites; IR3535 is not suitable for Anopheles mosquitoes.  Use of protective clothing, insecticide-treated bed nets, and insecticide-treated clothing is desirable.
An oral desensitization vaccine has been attempted, but the vaccine was deemed ineffective and the study sample size was too small for statistical significance.