Profound loss of adipose and other tissues is a hallmark of cancer cachexia, a debilitating condition associated with increased morbidity and mortality. Fat loss cannot be attributable to reduced appetite alone as it precedes the onset of anorexia and is much more severe in experimental models of cachexia than in food restriction. Morphological examination has shown marked remodelling of adipose tissue in cancer cachexia. It is characterised by the tissue containing shrunken adipocytes with a major reduction in cell size and increased fibrosis in the tissue matrix. The ultrastructure of 'slimmed' adipocytes has revealed severe delipidation and modifications in cell membrane conformation. Although the molecular mechanisms remain to be established, evidence suggests that altered adipocyte metabolism may lead to adipose atrophy in cancer cachexia. Increased lipolysis appears to be a key factor underlying fat loss, while inhibition of adipocyte development and lipid deposition may also contribute. Both tumour and host-derived factors are implicated in adipose atrophy. Zinc-alpha2-glycoprotein (ZAG), which is overexpressed by certain malignant tumours, has been identified as a novel adipokine. ZAG transcripts and protein expression in adipose tissue are up regulated in cancer cachexia but reduced with adipose tissue expansion in obesity. Studies in vitro demonstrate that recombinant ZAG stimulates lipolysis. ZAG may therefore act locally, as well as systemically, to promote lipid mobilisation in cancer cachexia. Further elucidation of ZAG function in adipose tissue may lead to novel targets for preventing adipose atrophy in malignancy.