Sheep

Sheep are a passive mob that supply wool when sheared or killed and can be dyed with any of the 16 colors before shearing to produce colored wool. Sheep are 1.25 blocks tall, 0.625 blocks wide and 1.4375 blocks long, and they naturally spawn in the following colors: white, black, gray, light gray, brown, and pink.

Usage
Sheep are the easiest source of Wool, which can be obtained by shearing them with Shears or killing them. Shearing a sheep will produce 2—4 Wool. Once sheep have been shorn, they appear shorn. They do not regrow their wool in the current version of minecraft, but there are future plans that they will be able to.

Sheep will drop one wool when killed even if they are killed by Fire, Cacti or Wolves. Wool can also be crafted using 4 pieces of String, but it is much less dangerous for the player to shear sheep rather than hunt down Spiders constantly.

A block of white wool can be crafted with a unit of dye to produce colored wool. However, a much more efficient method is to apply the unit of dye directly to an unshorn sheep by right-clicking on a white sheep while holding it, as the dyed sheep can drop 2—4 blocks of colored wool when shorn.

Behavior
Like other passive land mobs, sheep wander around aimlessly, often spawning in flocks of 2—8. They can be heard bleating occasionally, even from some distance away. When they encounter an obstacle, they will often try to jump over it, even if the object is too tall to jump over. Sheep can swim and make no attempt to stay out of water, therefore a common sight might be several sheep bouncing up and down in the water. A sheep's color has no effect on its behavior. In Beta 1.8, sheep appear to spawn in larger groups. Sheep do not despawn after they are shorn.

Breeding
As of 1.0, all passive mobs (Except squid and villagers) can be bred using Wheat.

Breeding two sheep dyed with a color will produce a baby sheep with the same color. This can be used to obtain large quantities of blue wool, rather than relying on the rare Lapis Lazuli.

History
Sheep were first introduced in Survival Test mode. In survival test, sheep used to graze and eat grass, turning it to dirt. This can be seen in a early video by Notch of this occurring: Minecraft sheep test. Before leather was added to the game, wool was used to craft leather armor. Each sheep dropped 1—3 white wool when hit (but this did not injure them) and 0—2 brown mushroom upon death. In Survival Test sheep would eat grass, turning it into a dirt block, and after eating three grass blocks, sheep would regrow their wool. In Indev and Infdev, sheep would only drop 2 blocks of white wool when hit. In an old Indev version, sheep would drop a mix of white, gray or black wool blocks. Sheep then reverted to dropping only 1—3 blocks of white wool when hit in Alpha. As of the first Beta update, sheep began to drop 1—3 blocks of the same color of wool as the sheep when it was hit.

In the Beta 1.2 update, sheep could naturally spawn with black, gray, and light gray wool along with the traditional white. Sheep could also be painted with dye and shorn to obtain colored wool blocks. As of Beta 1.4, brown and pink sheep were added to the naturally appearing colors of sheep. Beta 1.6 changed the recipe for wool from requiring 9 pieces of string to 4. With the inclusion of shears in Beta 1.7, sheep drop 1 block of wool when killed and 2—4 blocks when shorn.

Before Beta 1.8, sheep despawned even if they were shorn.

In Beta 1.9 Pre-releases 2—5, Sheep/Lambs spawned via animal breeding would always be white regardless of their parents' color. From Pre-release 6 and subsequent versions, the baby will take on the color of one of the parents. Having two parents of the same color assures a certain color offspring.

Sheep were originally planned to drop meat when killed. As of the Beta 1.8 update and subsequent Pre-releases, which added rotten flesh, raw beef, and raw chicken as animal drops, sheep still have yet to be associated with any consumable item. Before the Beta 1.7 update, the Player did not need to kill sheep to obtain wool because hitting them, even with a non-damaging attack such as thrown Snowball or a fish hook from a Fishing Rod, would cause them to drop the wool. Now Sheep do not drop wool and enter the "shorn state" until the Player shears them.

Before Beta 1.9 Pre-release 3, Sheep's health was 5 hearts, and after 1.9 Pre3, it was changed to 4 hearts.

Natural (in order of rarity)
* White was the original color before Beta 1.2.

Trivia

 * Sheep were the second mob to spawn with both a separate body and armor file, the first being the pig; the sheep's "armored" state is wooly, while the pig's "armored" state is when they are wearing a saddle.
 * After being shorn, all sheep (regardless of their original color), will have remnants of white wool color on their head and body.
 * Shorn sheep have a more slender head and exposed ears.
 * If you damage the sheep 7 hits (3 1/2 hearts) you can get 5 wool blocks by clicking both mouse buttons at the same time while holding shears, though it requires practice as you have 1/20 of a second between each mouse click.
 * If a sheep spawner is placed via hacking, there will be a black sheep model spinning inside, but it will spawn only the white ones.
 * According to Notch on Twitter, feeding a sheep with wheat can "tame" them with a picture for proof.

Bugs
A very rare glitch where a sheep can get stuck in the ground can happen. This seems to happen because the sheep is a little bit taller than 1 block.

Future
Jeb may add mutton (Mutton Chop?) to Minecraft.

Notch stated that sheep and possibly other passive mobs will eat grass, then the blocks will become soil blocks. It was also stated that wool will regrow on sheep.