The bermudagrass stem maggot, Atherigona reversura Villeneuve (Diptera: Muscidae), was first reported damaging bermudagrass Cynodon dactylon (L.) Pers grown for forage in 2010 in the southeastern United States. Injury results from individual larvae feeding internally on the vascular tissue just above the terminal node of the grass stem. Injury slows plant growth and reduces forage accumulation. To address the need for economic guidelines to manage this new pest, the relationship between the percent of stems damaged by bermudagrass stem maggot and forage yield was measured in commercial bermudagrass hay fields in northcentral Texas. Yield loss was estimated to be 9.97 kg/ha (8.90 lbs /acre) for each percentage of stems with bermudagrass stem maggot damage.This relationship was used to calculate economic injury levels for a range of hay market values and control costs. The impact of stem damage on protein content, energy, and digestibility of bermudagrass hay was also investigated. Although there was a significant trend for declining forage quality with increasing stem damage, stem damage explained very little of the model's variability.