Steve, are you thinking of the Caddisfly (genus Trichoptera)? Their larvae make tubular cases from small stones, twigs and sand. They live in water, though, at least at some stage, during their metamorphosis. Somebody had the clever idea to keep these animals in tanks filled with all sorts of small bits of gemstones and tiny pearls (I think). The larvae used these bits for making their cases and the constructions were then used as natural beads, worked into jewellery.

Evelyn