Diagenetic alteration is critical for the preservation of fossil cuticles of plant and animal origin and to the formation of kerogen. The process takes place over millions of years, but the stage at which it is initiated is not known. Laboratory decay experiments were carried out on shrimps, scorpions and cockroaches to monitor changes in the chitin-protein of the arthropod cuticle and associated lipids. The cockroach and scorpion exoskeleton remained largely unaltered morphologically, but the shrimp experienced rapid decomposition within a month, which progressed through the 44 week duration of the experiment as revealed using electron microscopy. Mass spectrometry and 13C NMR (nuclear magnetic resonance) spectroscopy revealed the association of an n-alkyl component with labile lipids, such as fatty acids with up to 24 carbon atoms, which were incorporated into the decaying macromolecule. The scorpion and cockroach cuticle did not reveal the incorporation of additional lipids, indicating that decay is important in initiating in situ lipid association. This experiment provides evidence that lipids can become associated with carbohydrate and proteinaceous macromolecules during the very early stages of decay, representing the first stage in the transformation process that contributes to the aliphatic rich composition ubiquitous in organic fossils and kerogen.