The midge life cycle is similar to that of the caddis: they live as larvae, are buoyed to the surface as pupae, emerge and deposit their eggs as adults. The wormish larvae are not of great interest to anglers, since they are generally tiny and not available to trout in concentrated numbers so that trout would be prompted to feed selectively on them.
But prior to midge hatches, larva and pupae do become washed into feeding lanes and trout will eat them. The pupae are extremely vulnerable as they kick feebly to the surface and hang suspended beneath the surface film. They are small, but so many are available that trout feed on them eagerly. They are the most important stage of the insect. Trout often feed selectively on midge pupae like on the Green River, but rarely feed selectively on midge larvae or adults.
Lifecycle: Midges undergo a complete metamorphosis or life cycle which includes an egg, larva, pupae, and adult stage. Caddisflies undergo a similar lifecycle.
The first stage consists
of an egg stage. 
Adult
midges typically mate during flight, and tend to gather in large mating swarms
along the waters edge of lakes or streams. Once mating is complete the females
fly back over the water to release fertilized eggs by tipping her abdomen
in the surface film. The tiny eggs eventually sink to the bottom of the lake
or stream.
The larval stage soon emergers from the egg and begins its life on the bottom of lakes and streams or free living in the water column. Because most midges are poor swimmers, they are often found hiding amongst the aquatic vegetation of the slower runs and flats of the river or stream. Some species of midges construct small tubes or cases in which they live in. These larval house are oriented upright at the lake or stream bottom.
Most midges have a one-year lifecycle. Some species have a two year lifecycle, and are typically found in lakes, which allows them to grow almost in an inch in lakes. These midge larvae are typically a maroon or bright red color and they are commonly referred to as bloodworms.
Fully developed larvae are then ready to undergo the change into the pupal stage. For many species, the final larvae stage occurs within a larval tube or case, which is sealed off while it undergoes the final transformation. This process can take as little as a few days to several weeks to complete. Once the pupa is fully developed it breaks free of the old larval casing and begins to rise to the surface of the stream or lake. They produce a gas beneath the abdomen which give the pupa a silvery or mirror like appearance that trout will often key in on. When the pupa reaches the surface film a split forms along the back of the thorax and the adult phase emerges on the surface of the water and immediately flies off. Most pupal emergence timing depends on the water temperature. After pupal emergence, mating usually takes place within 24-48 hours, completing its lifecycle.
Importance: Midges
are found in prolific numbers, 
which
account for heavy hatches, and this incredible number of species are what
make them so attractive to trout. Midges follow emergence timing patterns
that are repeated year after year. As fly fisherman, we describe the various
hatches by size and color. When it's all said and done, it is a case of matching
size and color of the various life stages and presenting those imitations
in as natural a way as possible. This typically turns into a challenge for
most anglers, which is why multiple sizes, colors, and shapes are so prevalent
in most of our midge fly arsenals.
To the fly fisherman,
midges constitute the most important group of aquatic Diptera. Fly patterns
referred to as midges come in an array of colors and usually range in size
from #18-28. It is difficult to determine exactly which species of midges
are being imitated, and patterns in general are not as species specific, except
in size, as are those of mayflies and stoneflies for example. Larval, pupal,
and adult patterns are popular, and taking a big fish on such a small flies
is an exciting challenge. 
Such
flies are particularly productive on lakes and streams during large midge
hatches. Some popular patterns include the Black Midge, Zebra Midge, Blue
Dun Midge, Chironomid Killer, Frostbite Midge, Miracle Midge, Grey Midge Pupa,
Green Midge Pupa, Blood Midge, and the Snow Fly.
The midge's small size and the selective feeding by large fish that frequently occurs during a midge hatch demands all the skills of the flyfisher. The small, unglamorous midge offers one of the ultimate challenges of fly fishing, and one of the ultimate thrills.