Background: Quantifying and controlling the inbreeding level in livestock populations is crucial for the long-term sustainability of animal husbandry. However, the extent of inbreeding has not been fully understood in sheep populations on a global scale. Methods: Here, we analyzed high-depth genomes of 210 sheep from 20 worldwide breeds to identify the pattern and distribution of genome-wide runs of homozygosity (ROH) and detect candidate selected genes in ROH islands for agronomic and phenotypic traits. Results: Leveraging whole-genome sequencing data, we found a large number of short ROH (e.g., <1.0 Mb) in all breeds and observed the overall higher values of ROH statistics and inbreeding coefficient in European breeds than in Asian breeds and Dorper sheep. We identified some well-known candidate genes (e.g., CAMK4, HOXA gene family, ALOX12, FGF11, and MTOR) and 40 novel genes (e.g., KLHL1, FGFRL1, WDR62, GDF6, KHDRBS2, and PAX1) that are functionally associated with fecundity, body size, and wool-related traits in sheep. Based on the candidate genes, we revealed different genetic bases for the fecundity traits of European and Asian sheep. Conclusions: This study improves the resolution of ROH detection and provides new insights into genomic inbreeding and trait architecture in sheep as well as useful markers for future breeding practice.