Insertion and deletion (INDEL) is one of the main events contributing to genetic and phenotypic diversity, which receives less attention than SNP and large structural variation. To gain a better knowledge of INDEL variation in chicken genome, we applied next generation sequencing on 12 diverse chicken breeds at an average effective depth of 8.6. Over 1.3 million non-redundant short INDELs (1-49 bp) were obtained, the vast majority (92.48%) of which were novel. Follow-up validation assays confirmed that most (88.00%) of the randomly selected INDELs represent true variations. The majority (95.76%) of INDELs were less than 10 bp. Both the detected number and affected bases were larger for deletions than insertions. In total, INDELs covered 3.8 Mbp, corresponding to 0.36% of the chicken genome. The average genomic INDEL density was estimated as 0.49 per kb. INDELs were ubiquitous and distributed in a non-uniform fashion across chromosomes, with lower INDEL density in micro-chromosomes than in others, and some functional regions like exons and UTRs were prone to less INDELs than introns and intergenic regions. Nearly 620,253 INDELs fell in genic regions, 1,765 (0.28%) of which located in exons, spanning 1,358 (7.56%) unique Ensembl genes. Many of them are associated with economically important traits and some are the homologues of human disease-related genes. We demonstrate that sequencing multiple individuals at a medium depth offers a promising way for reliable identification of INDELs. The coding INDELs are valuable candidates for further elucidation of the association between genotypes and phenotypes. The chicken INDELs revealed by our study can be useful for future studies, including development of INDEL markers, construction of high density linkage map, INDEL arrays design, and hopefully, molecular breeding programs in chicken.