Abstract Agricultural sector accounts for about 1/3 of the Iranian GDP and 1/4 of the country workforce. More than 90% of the Iranian food requirements are produced in the country. Animal agriculture covers over 40% of the agricultural activities. More than 57% of the available animal units in the country are sheep and goats. Desertification, deforestation, water shortage, erosion, low efficiency and out-put and mostly illiterate small farmers are the typical Iranian agricultural obstacles. Iranian sheep and goat industry is characterized by; owned by small farmers, based on extensive grazing, highly influenced by the environmental variables, its increment rate is declining in comparison with the past decades because of urbanizations industrialization and low income. All of the Iranian sheep breeds except one are fat-tail and various coat colors from white to black and many classes between. There are more than 28 distinctive breeds of sheep in Iran which appear in a variety of size, shapes, types and color. Broadly the country sheep are grouped into 4 main types of, meat, dual-purpose, fur-producing and dairy breeds. Baluchi, Karakul and Zel sheep are the typical breeds. Unlike sheep, Iranian goats are not grouped well according to their products importance. More than 20 breed of goats have been recognized in Iran but the two typical breeds are Marghoz and Raeni goats which produce attractive and expensive mohair and kashmir fiber. Sheep and goat systems in Iran are changing rapidly in response to variety of drivers. The annual increment rate for sheep during the 30 years period (from 1967 to 1997) was 721,667 head sheep per year. The increment rate of sheep population for the last decade (1997 – 2007) was only 15,400 head sheep per year. These figures clearly show the reduction rate for sheep population during the noted decade was 46.9 times in comparison with previous period (30 years). This trend is even worse for Iranian goat population. The carcass weight of both sheep and goats gets heavier with advancing the seasons, probably due to their growth pattern and maturity. About 52.% of Iranian sheep and goats are slaughtered under the legal controlled healthy conditions and nearly 48% of these animals are slaughtered out of the slaughter houses in spite of its danger to the public health. The overall reproduction performances of Iranian sheep and goats are lower than the exotic pure breeds. It seems the variability in environmental patterns such as low rainfall and feed shortage, uncertainty in farmers’ income and market conditions will be the most important factors in pushing the compulsory transition in Iranian sheep and goat industry. This transition may have critical effects on the animal-based food security mainly red meat. Therefore, more attention is required from the government and non-governmental organizations for handling this trend to the well-managed right direction.

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