Sheep

Sheep are passive mobs that first appeared in Survival Test mode. They act much like pigs, wandering aimlessly and usually spawning in herds of two to eight individuals. It is possible to gain cloth by shearing sheep with any object, including bare fists. Damage taken from fire or drowning does not trigger shearing. Sheep that have been sheared will exhibit a 'naked' skin and cannot be harvested again in Alpha mode. Sheep do not yield any drops upon death, and the only reason to kill them is to prevent them from inadvertently pushing you over cliffs or into lava.

In Survival Test, sheep eat Grass which reverts the blocks to Dirt. Upon eating, they will have their dropped Cloth regrown. Sheep do not stray far from the area they spawn at; but having spawned at a place that lacks grass will make the sheep migrate to a place with grass.

Drops
Survival Test
 * 0-2 Brown Mushrooms (on death)

Alpha
 * 1-3 cloth blocks (on hit)