Caterpillars Have Been Multiplying Like Crazy - Help!

[tribie]

For some reason, the caterpillars have been multiplying on one of our trees and I am beginning to be scared. My dad said not to kill them because they might become butterflies. In the meantime, the tree is losing its leaves and it's scary because they might move to the other trees and plants as well. It's also scary because they might fall on the people walking under the tree. It would be great if they all become butterflies though but if not, the tree might die. What do you think should I do?