The life cycle of H. diminuta involves rodents (rats primarily) as the definitive host and beetles (flour and grain beetles, Tribolium spp. and Tenebrio spp., respectively) as the intermediate host. The tapeworm's eggs are passed in the rat's feces, and beetles are infected when they eat the eggs; the metacestode stage in the beetle is called a cysticercoid. The rat is infected when it eats an infected beetle. Once the egg is digested by the intermediate host arthropod, the oncosphere, a fully developed larva contained in the egg, is released into the intermediate host. Its function is to migrate to the haemocoel (body cavity) of the insect where it will grow and differentiate into an encapsulated juvenile worm. This stage, the cysticercoid, is dormant and resides in the insect until both are eaten by a foraging rat. Within the definitive hosts' stomach and intestine, the larval worm responds to chemical signals and excysts. It then invades the intestinal lumen, evaginates its scolex, attaches to the intestinal mucosa and develops into an adult.
Once the adult H. diminuta is embedded in the host, it can produce over 250,000 eggs per day. Thus, over a period of slightly over a year, a single tapeworm could produce a hundred million eggs and if all these eggs reached maturity, it would be equal to 20 tons of tapeworm tissue. There is an extremely low chance for each egg to reach reproductive maturity and that is why H. diminuta lays so many eggs.