Sheep with naturally coloured wool are found occasionally in most breeds. In New Zealand, high-quality coloured sheep are often kept for their wool, which has both commercial and handcraft uses. Among the most favoured breeds are Merino, Romney, Corriedale, Polwarth and English Leicester, though interest in other breeds such as Gotland and Arapawa is increasing.

Each breed has characteristics that make its wool suitable for particular uses. Good management also plays a big part, ensuring that wool is sound and free of contaminants such as vegetable matter.  The way wool is handled at shearing time is also very important.

There are two main gene series that control the colour of New Zealand sheep: one governs colour pattern and the other governs the actual colour that the sheep will be, in any parts that are not white. Every sheep inherits two genes of each series, one from each parent.

There can be wide variations between fleeces even within a breed. However, knowing something about the breeds will give the craftsperson an idea of what to expect. Each fleece must still be selected on its merits.