A 28-year-old, female umbrella cockatoo (Cacatua alba) was evaluated because of lethargy, anorexia, regurgitation, and coelomic swelling of 6 month's duration, which corresponded to cessation of egg laying. Radiographs and ultrasound examination demonstrated extensive deposits of coelomic fat and an enlarged oviduct. Exploratory celiotomy demonstrated copious amounts of firm, nodular fat completely surrounding the gastrointestinal tract, resulting in extensive chronic adhesions between intestinal loops. Free yolk was present in the cranial left coelom, yolk coelomitis was diagnosed, and a salpingohysterectomy was performed. Two days after surgery, the bird stopped passing feces and began regurgitating after eating, and a colonic obstruction was demonstrated via contrast radiography. Euthanasia was elected, and necropsy revealed an obstruction of the distal colon caused by extraluminal compression by adhesions of firm, nodular fat. Histologic examination demonstrated extensive fat necrosis with granulomatous inflammation, characterized by cords of necrotic fat surrounded by multinucleated giant cells and epithelioid macrophages with scattered lymphocytes and plasma cells and rare heterophils. The clinical signs, gross lesions, and histologic lesions are characteristic of massive fat necrosis (lipogranulomatosis) in ruminants and mesenteric panniculitis in humans and companion mammals. This is the first report, to our knowledge, of this disease in psittacine birds.