  We present near-infrared high resolution observations of the young binary
system Z Canis Majoris using the adaptive optics system at the Keck-II
telescope. Both components are unresolved at 1.25 and 1.65 microns, although
high dynamic range images reveal a previously unknown jet-like feature in the
circumstellar environment. We argue that this feature probably arises from
light scattered off the walls of a jet-blown cavity, and proper motion studies
of this feature can probe the dynamics of the bipolar outflow. Potentially, the
morphology of the dust-laden cavity walls offers a new probe of the momentum
profile and collimation of bipolar winds from young stellar objects. We also
derive high precision binary parameters, which when combined with historical
data have allowed the first detection of orbital motion. Lastly, our
observations confirm the high degree of flux variability in the system; the
North-West binary component is dominant at H-band, in contrast to all previous
observations.
