Growth in the low-fat cheese market has been slower than would be anticipated on the basis of increased consumer awareness of dietary fat intake. Consumer dissatisfaction with the quality of first-generation low-fat products has highlighted the need for improved technology. Significant advances in understanding the biochemical and physicochemical characteristics of low-fat variants in the past decade have led to novel technological developments. Approaches that have the potential to improve the flavour, texture and functionality of reduced- and low-fat cheese are reviewed here. Topics include the control of processing variables, the selection of appropriate starter and adjunct bacteria, and the use of fat mimetics to improve texture. Factors influencing flavour and texture development in low-fat variants are also considered.