Endothelial PAS domain protein 1 gene (EPAS1) is a member of the HIF gene family. This gene encodes a transcription factor subunit that is involved in the induction of oxygen-regulated genes. Several studies have demonstrated that a mutation in EPAS1 could affect oxygen sensing, polycythemia, and hemoglobin level. However, whether EPAS1 mutation affects sheep oxygen metabolism is still unknown. Therefore, we explored the relationship between the variation of EPAS1 and oxygen metabolism in sheep. In this study, variations in ovine EPAS1 exon 15 were investigated in 332 Tibetan sheep and 339 Hu sheep by polymerase chain reaction-single strand conformation polymorphism (PCR-SSCP) analysis. In addition, we studied the effect of these variations on blood gas in 176 Tibetan sheep and 231 Hu sheep. Finally, the mRNA expression of EPAS1 in six tissues of Hu sheep and Tibetan sheep living at different altitudes (2500 m, 3500 m, and 4500 m) was analyzed by real-time quantitative PCR (RT-qPCR). Four alleles (A, B, C, and D) were detected, and their distributions highly differed between Tibetan sheep and Hu sheep. In Tibetan sheep, B was the dominant allele, and C and D alleles were rare, whereas all four alleles were common in Hu sheep. Six single nucleotide polymorphisms (SNPs) were identified between the four alleles and one of them was non-synonymous (p.F606L). While studying the blood gas levels in Tibetan sheep and Hu sheep, one variant region was found to be associated with an elevated pO2 and sO2, which suggested that variations in EPAS1 are associated with oxygen metabolism in sheep. RT-qPCR results showed that EPAS1 was expressed in the six tissues of Hu sheep and Tibetan sheep at different altitudes. In addition, the expression of EPAS1 in four tissues (heart, liver, spleen, and longissimus dorsi muscle) of Hu sheep was lower than that in Tibetan sheep from three different altitudes, and the expression of EPAS1 was positively correlated with the altitude. These results indicate that the variations and expression of EPAS1 is closely related to oxygen metabolism.