The dependency of cancer cells on glucose can be targeted with high-fat low-carbohydrate ketogenic diet (KD). However, hepatic ketogenesis is suppressed in IL-6 producing cancers, which prevents the utilization of this nutrient source as energy for the organism. In two IL-6 associated murine models of cancer cachexia we describe delayed tumor growth but accelerated onset of cancer cachexia and shortened survival when mice are fed KD. Mechanistically, we find this uncoupling is a consequence of the biochemical interaction of two simultaneously occurring NADPH-dependent pathways. Within the tumor, increased production of lipid peroxidation products (LPPs) and, consequently, saturation of the glutathione (GSH) system leads to ferroptotic death of cancer cells. Systemically, redox imbalance and NADPH depletion impairs the biosynthesis of corticosterone, the main regulator of metabolic stress, in the adrenal glands. Administration of dexamethasone, a potent glucocorticoid, improves food intake, normalizes glucose homeostasis and utilization of nutritional substrates, delays onset of cancer cachexia and extends survival of tumor-bearing mice fed KD, while preserving reduced tumor growth. Our study highlights that the outcome of systemic interventions cannot necessarily be extrapolated from the effect on the tumor alone, but that they have to be investigated for anti-cancer and host effects. These findings may be relevant to clinical research efforts that investigate nutritional interventions such as KD in patients with cancer.