Sheep are reared across a wide range of agro-ecosystems in Bhutan. A sample survey was conducted to characterise indigenous sheep breeds and husbandry practices. Information was recorded on morphological characteristics, body measurements and management variables. Based on geographical locations, four distinct native sheep types are described: Jakar, Sipsu, Sakten and Sarpang. This paper also describes the socio-economic importance of sheep, its trends and future prospects of sheep farming in Bhutan.