An aquarium-maintained male California moray Gymnothorax mordax had a symmetrical enlargement of the soft tissues of the head dorsal to the cranium for 2 years prior to its death. This individual was anesthetized for radiographic and ultrasonographic examination of the lesion, and blood was collected for plasma biochemical analytes and lipid profiles. Radiographs and ultrasound of the lesion demonstrated a symmetrical and homogeneous soft tissue density that was consistent with adipose tissue. Plasma cholesterol and triglyceride values appeared elevated; therefore, the animal's diet was amended to decrease fat consumption. Triglyceride values decreased after dietary changes were made; however, values for cholesterol, high-density lipoproteins, and low-density lipoproteins fluctuated but remained largely unchanged. Histopathological assessment of the lesion revealed localized xanthogranulomatous inflammation of hypodermal adipose tissue. The etiology of the lesion in this animal was never determined. This paper describes the first documented case of localized xanthogranulomatous panniculitis in a California moray and demonstrates the need for additional research on specific dietary requirements, species-specific physiological differences, and lesions involving the adipose tissue of morays in comparison with other teleost species.