Wool is one of the most important animal fibers in the textile industry and the diameter directly affects its economic value. However, the molecular mechanisms underlying the wool diameter have not been fully elucidated. In the present study, high-throughput RNA-Seq technology was employed to explore the skin transcriptome using 3 sheep with fine wool (fiber diameter, FD<21.0mm) and 3 sheep with coarse wool (fiber diameter, FD>27.0mm). In total, 28,607,228 bp clean reads were obtained, and 78.88%+/-3.84% was uniquely aligned to the reference genome across the six samples. In total, 19,914 mRNA transcripts were expressed (FPKM>0) in the six skin samples, among which there were certain well-known genes affecting the skin hair cycle, such as KRTAP7-1,KRT14,Wnt10b,Wnt2b, β-catenin,and FGF5. Furthermore, 467 expressed genes were significantly differentially expressed between the two groups, including 21 genes up-regulated and 446 genes down-regulated in the sheep with the smaller fiber diameter. To verify the results, 13 differentially expressed genes were randomly selected to validate the expression patterns using qRT-PCR, and the correlation between the mRNA expression level from qRT-PCR and RNA-Seq data was 0.999 ( P<0.05). These differentially expressed genes were particularly enriched in GO processes related to lipid metabolism, skin development, differentiation, and immune function (P<0.05). The biological processes were involved in collagen catabolism, negative regulation of macromolecule metabolism, steroid hormone stimulation and lipid metabolism. A significant KEGG pathway involving the “metabolism of lipids and lipoproteins” was also enriched. This study revealed that the lipid metabolism might constitute one of the major factors related to wool diameter.