Abstract Evaluating how, when, and where an animal moves in their environment can provide insights into their health and welfare states. Spatial tracking systems for monitoring sheep are less well developed than accelerometer-based systems, but have the potential to add important behavioral information to Precision Livestock Farming (PLF) applications. Global Positioning Systems (GPS) can be used to track pasture-based animals, but are not suitable to establish indoor locations. Real-Time Location Systems (RTLS) are a recent development that use radio-frequency signals emitted by tags to track the indoor location of an animal online and continuously. Raw RTLS data in the form of x, y coordinates can be used to calculate multiple spatial metrics, including velocity, acceleration, distance moved, the proportion of time an animal spends in different functional areas, social network attributes, and range size. RTLS can also be integrated with accelerometers to potentially improve predictive accuracy of behavioral algorithms. RTLS have been primarily tested and validated for indoor tracking of dairy cattle and have been used to assess behavioral time budgets and to detect space-use changes related to estrus or health status. For on-farm applications, these data must be transformed into threshold-based algorithms to generate notifications on changes in the health or welfare status of an animal. Algorithm development needs to account for confounding factors such as breed, sex, age, parity, and stage of lactation, as well as environmental variability that can influence the performance of decision-making tools under real-life conditions. In addition, independent validation studies of commercial systems are lacking, and many calculate positioning error with stationary objects rather than moving animals, potentially inflating accuracy estimates. In conclusion, there is growing empirical support for the use of RTLS as a PLF technology for on-farm animal health and welfare assessment. However, research is needed to validate these systems in sheep and identify spatial metrics that are accurate and robust predictors of health and welfare states for commercial applications.