earthworms typically live in damp (but not wet), loose soil. they can also be found in loose leaf litter, and after it rains they can be found on the surface as they are forced out of the water-logged soil. many gardeners welcome earthworms, as they aerate and enrich the soil with their droppings. they are also found in compost, feeding on decaying vegetable matter. an earthworm's burrow can be seen by the pile of dark, sand-like droppings, or casts, surrounding the entrance.