Until recently, assessment of sheep welfare has received little attention, perhaps because sheep have traditionally been managed extensively and their relative behavioural freedom has led to perceptions of fewer or lower risks to their welfare. However, extensively managed sheep are still vulnerable to welfare challenges, and intensive systems and their attendant welfare impacts are becoming increasingly common. Regardless of the production system, practical and validated indicators of both negative and positive experiences that influence sheep welfare are required to facilitate the identification, prevention and mitigation of negative welfare impacts and to enhance welfare wherever possible. In this chapter, a process is outlined for identifying welfare indicators that are valid and practical for use on-farm, during transport or before slaughter. The chapter includes a case study on the validity of body condition score as an indicator of hunger and points to the need for research to validate indicators of specific states identified as posing risks to sheep welfare.