Genetic modification technologies can be used for modifying animal genome to express exogenous genes or affect the function of endogenous genes. In animal breeding, genetic modification technologies allow the rapid generation of germplasms with beneficial traits. It includes traditional genetic modification, virus or sperm carrier-mediated genetic modification and nuclease-mediated genome editing, especially the CRISPR/Cas9, one of the artificial nuclease genome editing technologies, have been applied in genome editing in many domestic animals including sheep (Ovis aries). Compared with conventional strategies used for animal breeding, there is great value for sheep breeding improvement by using genome editing technology, which is more effective and timesaving. In this review, we summarize the approaches of genetic modification in sheep and discuss the possibility of molecular design and breeding of sheep by genome editing technologies. We also identify the potential bottlenecks and challenges of these technologies in sheep breeding.