Rice (Oryza sativa L.) ranks second to wheat in area and production on the global level. Unfortunately, it is attacked by several insect pests. The rice stem borer, Chilo agamemnon Bles. is the most important in Egypt. The current investigation was carried out at the Experimental Farm of Sakha Agricultural Station, Kafr EL-Sheikh Governorate in 2013 and 2014 rice seasons using two cultivars, Giza 178 (high tillering capacity) and Egyptian Jasmine (medium tillering capacity) to establish the correlation between borer infestation as white heads and rice yield losses to determine the economic threshold and injury levels of C.agamemnon infestation in rice fields. Due to the great difficulty to use the technique of artificial infestation by the rice stem borer, the simulated technique (panicle removal) was applied to induce different levels of simulated white heads. The panicles were removed by hand to get gradual levels of stimulated white heads; 0, 2, 4,6, 8, 10, 12, 14 and 16%. Yield components (panicle weight, 1000-grain weight and filled grain %) increased at the higher levels of panicle removal. This could be interpreted in the light of phenomenon compensation. This phenomenon suggests that the nutrients going to removed panicles are translocated to the adjacent ones. Consequently, the panicles adjacent to the removed ones become healthier than normal, and compensate, to a certain extent, the removed ones. The final grain yield was negatively affected, in the current study, by high levels of panicle removal. In Giza 178 rice cultivar (high tillering), the grain yields were 2315, 2295 and 2311, match to 1815, 1755 & 1781 g/ 2 m2 at 0, 2 & 4% panicle removal, respectively. However, in both cultivars, the lowest grain yields were at 12, 14 1nd 16 % simulated white head (panicle removal). Considering the cost of chemical control against the rice stem borer, and obtained grain yield at different levels of simulated white heads, economic threshold and economic injury levels were estimated. In Giza 178, the economic threshold was determined as 10 and economic injury as 12 % white heads (panicle removal), while the economic threshold level of Egyptian Jasmine cultivar was determined as 8% white heads, and economic injury as 10% white heads. These results are important to the decision makers and rice growers to avoid using insecticides before the rice stem borer infestation reaches the economic threshold. On the other hand, economic threshold level should be assessed under several circumstances, e.g. location, cultivar, cultural practices, prices of insecticides and prices of rice.