http://www.leangains.com/2009/08/questions-answers.html
From the link:
Q: "My sex drive just winds down to nearly nothing when I'm running an intense caloric deficit. Is there some documented/anecdotal correlation on this, or is it random according to the individual?"
A: It's not random, it's a fact that weight loss/calorie restriction, even moderate in nature, causes a delayed response to gonadotropin-releasing hormone (GnRH). This neurohormone is secreted in a pulsatile manner from the hypothalamus, and upon binding to receptors in the pituitary gland, it activates synthesis of reproductive hormones, luteinizing hormone (LH) and follicle-stimulating hormone(FSH). This axis is partially under control by "master" hormones involved in sensing the general energy status of the body; leptin and insulin, for example.
An energy deficit lowers leptin, which in turn impacts the reproductive axis negatively. This makes complete evolutionary sense, when you consider that reproduction is such an energy costly process. Conversely, high body fat percentage also affects the reproductive axis negatively, through other mechanisms -insulin resistance being one major cause discussed in this context.
Looking at studies on this topic, the effect is proportional to the energy deficit. In one paper, they noted that the delayed response in GnRH pulsatility was "intermediate in extent" when comparing moderate weight loss (-1% body weight/week or some such) to that of anorectics or VLCD (400-800 kcal/day).
My personal experience is that a moderate deficit (i.e net deficit/week is moderate, say -3500 kcal) has no noticeable impact, while a high deficit (i.e -7000 kcal/week) has a negative impact. The latter is augmented on very low carb or straight ketogenic diets. Cyclical diets are superior in this regard.