Endothermic mammals in cold environments have a range of adaptations enabling them to maintain a constant core body temperature. Of critical importance to many is a thick hair coat that retains air and so acts as a barrier to minimize heat exchange between the skin and ambient environment. Disruption to the pelage can increase costs of maintaining body temperature and compromise survival of the individual. Fur seals rely on a pelage of dense, dry underfur protected by guard hairs for insulation in the aquatic environment. Since 1989 a potentially serious alopecia (hair loss) syndrome has been recognized in Australian fur seals. Between September 2007 and February 2010 we investigated the prevalence and potential impacts of the condition. The syndrome manifests as bilaterally symmetrical alopecia, which occurs predominantly in juveniles and has a strong sex bias (51 of 55 juveniles captured for examination were female). It also occurs in adult females but has never been seen on postpubescent males. Prevalence of alopecia was highest at the large Lady Julia Percy Island colony (approximately 30,000 seals) in northwestern Bass Strait where it has a distinct seasonal pattern of prevalence, peaking in spring and summer with up to 50% of juvenile females affected. Thermal images indicated that alopecic and nonalopecic areas of the dorsal thorax had a mean difference of 6.6°C, and affected animals were in significantly (P < 0.001) poorer body condition than unaffected animals.