A Maritime and Coastguard agency spokesman said the man, described as blond and between 40 and 50, is an experienced canoeist. He is originally from New Zealand but has lived in Shetland for many years.
He was last seen at 11am on Thursday wearing a wetsuit and carrying a red canoe after parking in Bigton, a village on the west coast.
Two lifeboats, four coastguard rescue teams and a helicopter are helping in the search. Volunteers are also scouring the coast for a sign of the missing man.
A Maritime and Coastguard Agency spokesman said: "He is an experienced canoeist and has gone on long expeditions in the past. We are appealing to anyone in the area who may have seen him to contact the coastguard or Lerwick police."
The weather was showery, with variable visibility when he went missing on Thursday morning. It is thought the man was on his own when he headed off in his canoe.
A Shetland Coastguard spokesman added: "Many folk here are concerned about him. It's unusual for him to go so long without contact."
Tom Smith, who runs kayaking trips off Shetland, said it was not unusual for experienced kayakers to go out alone. He added: "You get lots of advice saying don't go on your own but that's normally for inexperienced people. It can be dangerous there but it depends on what you do. Anywhere can be dangerous. I have seen the Firth of Forth on dangerous days.
"At the west side of Shetland the weather changes very fast. You need to think very carefully about what you are doing. But the record for sea kayaking has been very good over the past 20 to 30 years.
"There have been a few incidents involving visitors but nothing as far as I know involving people who live there."