Concerning baking losses, the water retention capacity was affected by the substitution of margarine with extra virgin olive oil in Madeira cakes (Table 2). The mean baking loss for the cakes prepared with extra virgin olive oil or extra virgin olive oil/ margarine mixture was 8.8% and 8.9%, respectively, and no significant difference existed between them (P > 0.05). The highest baking loss, 10.1%, observed for the control cake could be attributed to the fact that this cake had a larger air-water contact area, since there was in its batter a greater number of small sized air bubbles (Fig. 1), which are expected to form, during the baking process, more channels leading to greater water loss compared to the rest