Sheep are an important source of fiber production. Fibroblast growth factor 5 (FGF5) is a dominant inhibitor of length of the anagen phase of the hair cycle. Knockout or silencing of the gene results in a wooly coat in mice, donkeys, dogs, and rabbits. In sheep breeding, wool length is one of the most important wool quality traits. However, traditional breeding cannot accurately and efficiently mediate an advanced genotype into the sheep genome. In this study, we generated 3 knockout sheep via the 1-step clustered regularly interspaced short palindromic repeat (CRISPR)/Cas9 system. Sequencing analysis confirmed that mutations in the gene existed in all germ lines of 3 founders: besides the intact sequence, 3 kinds of deletions in the gene (including 5, 13, and 33 bp) were detected. The changes in the primary and senior structure of the FGF5 protein due to the 3 deletions in founders suggested that the FGF5 protein was dysfunctional. In addition, the expression level of intact mRNA in heterozygous individuals decreased compared with the wild types ( < 0.01). Functionally, we discovered that wool length in founders was significantly longer than in wild types ( < 0.05). Collectively, the knockout sheep with the longer wool length phenotype will provide an efficient way for fast genetic improvement of sheep breeding and promote the development of wool industry.