Fibroblast growth factor (FGF) 5 regulates the development and periodicity of hair follicles, which can affect hair traits. Loss-of-function mutations associated with long-hair phenotypes have been described in several mammalian species. Sheep is an important economic animal, however, the evolution characterizations and biological mechanism of oFGF5 (Ovis aries FGF5) gene are still poorly understood. In this study, oFGF5 gene was obtained by resequencing the whole genome of three Dorper sheep and RACE of two Kazakh sheep FGF5. We proposed FGF5 was phylogenetically related to FGF4 family and oFGF5 clearly orthologed to goat FGF5. Six loci were found from the positive selection results of FGF5 and half of them located on signal peptide. The basically similar rates of function-altering substitutions in sheep and goat lineage and the rest of the mammalian lineage of 365 SNPs indicated that the FGF5 gene was quite conservative during evolution. Homology modeling of the oFGF5 suggested that it has a highly conserved FGF superfamily domain containing 10 β-strands. Furthermore, the protein-protein docking analysis revealed that oFGF5 have the potential to form heterodimers with oFGFR1, the predicted interaction interface of FGF5-FGFR1 heterodimer was formed mainly by residues from FGF superfamily domain. Our observations suggested the evolutionary and structural biology features of oFGF5 might be relevant to its function about hair follicle development and modulating hair growth, and we confirmed our speculation by using the FGF5 gene editing sheep produced by CRISPR/Cas9 technology.