The development of the follicle population in Merino sheep skin was studied from 30 days pre-partum to 112 days post-partum in single- and twin-born Merino lambs. The total number of primary follicles estimated from primary follicle density and skin surface area did not change over this period, while secondary follicle number increased to Day 28 post-partum in singles and Day 56 post-partum in twins. Twins had 14% fewer total follicles than singletons (P < 0.001), largely reflecting a bodyweight (hence estimated skin surface area) difference of 10%, with little difference in total follicle density (P > 0.05). Immediately post-partum there was a 36% decrease (P < 0.0001) in the secondary to primary follicle ratio (S/P) of the twin lambs, while a small non-significant decrease (7%; P > 0.05) occurred in the single lambs. This attrition coincided with a surge in plasma cortisol concentration that commenced ~12 days before birth and persisted for 6–12 days post-partum. The surge in plasma cortisol concentration occurred in both single and twin lambs, commencing on Day 138 of gestation; however, the peak cortisol concentration and the period over which cortisol remained elevated was greater in twin lambs than in singletons (P < 0.001). This study confirms a previous finding of a perinatal reduction in S/P ratio in Merino sheep. The reduction was greater in twin lambs than in singletons but the follicles of twins recovered rapidly so that there was little difference in final S/P ratio between birth types after Day 30 post-partum. The postnatal follicle reduction followed the perinatal surge in plasma cortisol concentration and appeared to reflect the magnitude of the cortisol surge in that twins, which displayed a higher peak cortisol concentration, had a greater reduction in active follicles than singletons.