Pasteurella multocida can be part of the upper respiratory flora of animals, but under conditions of stress or immunocompromisation, the bacteria can cause severe respiratory symptoms. In this study, we compared 10 P. multocida isolates from Icelandic sheep with respiratory symptoms and 19 isolates from apparently healthy abattoir sheep. We examined capsule type, genetic variability and the presence of the toxA gene in the two groups. Surprisingly, we found that all ovine P. multocida isolates examined in this study carried the toxA gene, which markedly differs from what has been published from other studies. Interestingly, all isolates from abattoir animals were capsule type D, whilst bacteria isolated from animals with clinical respiratory symptoms had capsule type A, D or F. Examination of seven housekeeping genes indicated that the clinical respiratory isolates were significantly more heterogeneous than the abattoir isolates (P<0.05, two-tailed Mann-Whitney U test). The results suggest that there may be at least two groups of P. multocida in sheep - a genetically homogeneous group that resides in the respiratory tract and a genetically heterogeneous group that is the predominant cause of disease.