When I drag and drop a houdini asset into a level in unreal, I get this error “Houdini installation was not detected. Failed to locate or load libHAPIL.dll. No cooking/instantiation will take place”.

The asset then fails to load or display properly in the level. How do I solve this?

Hi,

This error means that the plugins was unable to find Houdini via the registry.
You can solve this by going into the plugin's settings (in projects settings), enabling “use custom location” and point the plugin to your Houdini install folder.
You should be fine after restarting unreal.

Also make sure that you're using the version of Houdini that is expected by the plugin.