Powder post beetles and termites are both wood-boring insects that can cause significant damage to wooden structures. Powder post beetles are smaller than termites and bore small, round holes into wood, leaving behind fine, powdery excrement. Termites, on the other hand, are larger and work together to build nests and tunnels within wood, consuming it from the inside out. Both types of insects require moisture to survive, but powder post beetles prefer dry wood, while termites prefer damp wood.