Low fibre diameter and high fleece weight are important determinants of the economic value of the Merino fleece. The combination of these traits is found in Merino sheep with high follicle densities resulting from a high secondary to primary follicle ratio. Morphological stages in the development of primary and secondary follicles of fetal sheep skin have been well described. We have used gene expression profiling of fetal skin to identify genes that may be important in controlling these follicle developmental processes. A combined ovine (2.3 K) and bovine (6.14 K) cDNA microarray of 2 fetal and 1 adult stage skin tissues was constructed to compare gene expression levels between fetal day 82, day 105, day 120 and adult sheep skin developmental stages. The transcript profile resulted in 238 differentially expressed array elements relative to the adult expression, which represented 132 unique genes. These clustered into 50 up- and 82 down-regulated genes and distinct gene ontologies including structural constituents, phosphate transport, signal transduction and organogenesis. Northern blot analysis of 2 selected genes, S100A7LI and TAGLN, validated the microarray results. This list of genes contains candidates of interest for further investigation into the molecular control of wool follicle development.