In this study, PCR-SSCP analysis was used to identify genetic variation in IGFBP-3 gene in Chinese Merino and Kazakh sheep. A PCR product of 178 bp corresponding to partial intron1 illustrated three unique binding patterns by SSCP analysis. Frequencies of the genotype AA, AB, BB and allele A, B in Chinese Merino sheep were 0.70, 0.24, 0.06, and 0.82, 0.18 respectively , and they were 0.87, 0.13, 0.00, and 0.93, 0.07 respectively in Kazaka sheep. Sequence analysis revealed a G/T transversion at position 122 of the fragment. This polymorphic locus of IGFBP-3 gene was at Hardy-Weinberg dis-equilibrium (P<0.01) in the two breeds. Different genotypes slightly affected several wool traits of Chinese Merino sheep. The individuals of genotype AA, AB, and BB had no significant difference in post-shearing weight and clean wool rate. Sta-ple length (SL) was decreased with the genotype of AA, AB, and BB, and the difference between AA and AB was significant (P<0.01). Greasy fleece weight (GFW) and follicle density in individuals of genotype AA was significantly lower than that in individuals of genotype AB (P<0.01) and BB (P<0.05); Average fiber diameter (AFD) in individuals of genotype AA was significantly higher than that in individuals of genotype AB (P<0.01) and BB (P<0.05).