The seroprevalence of Toxoplasma gondii infection in sheep in southern Mexico is largely unknown. Antibodies to T. gondii were determined in serum samples of 429 sheep from 4 farms in 2 geographical regions in Oaxaca State, Mexico, using the modified agglutination test (MAT); 99 (23.1%) of the 429 sheep had positive MAT titers: 1:25 in 35, 1:50 in 18, 1:100 in 7, 1:200 in 1, 1:400 in 3, 1:800 in 10, 1:1,600 in 5, and 1:3,200, or higher, in 20. Seroprevalence of T. gondii infection varied with management, breed of sheep, and location. It was significantly higher in sheep raised under semi-intensive (grazed on cultivated pasture and hay) conditions than in those raised under semi-extensive conditions (grazed on communal natural grass land). The seroprevalence of T. gondii infection was significantly higher in mixed-breed sheep than in pure breeds. Sheep raised in temperate climate in municipalities at 1,560–1,600 m above sea level (Central Valley region) had a significantly higher seroprevalence of T. gondii infection than those raised in semiarid and warm-humid climates in municipalities at 1,020–1,080 m of altitude (Cañada region) (29.8% vs. 7.1%, respectively). This is the first report of T. gondii infection in sheep in Oaxaca State, Mexico.