Genetic variation in the Pag island sheep population was analysed using seven microsatellite loci and by sequencing of the proximal part (nt 15816–16153) of the D-loop region at mtDNA. The mean number of alleles per microsatellite locus (8.71) and mean expected heterozygosity (0.833) reveal relative high genetic variability. Sequencing of the part of the mtDNA D-loop region from 10 unrelated animals revealed 39 polymorphic sites characterizing seven haplotypes which clustered into two main haplogroups (M and P). Sequence differences among haplotype groups M and P were from 6.78 to 9.44%. Our data support the hypothesis that the M haplotype represents a trace of Merinisation of the Pag island sheep, reflected by the high degree of sequence identity with the Merino breed sequence (99%). The P haplotype belongs to the original primitive sheep that have inhabited the island of Pag for thousands of years. These findings suggest that modern Pag island sheep were derived from at least two maternal lineages, the autochthonous and imported one.