Unlike the mouse embryo, where loss of DNA methylation in the embryonic nucleus leaves cleavage stage embryos globally hypomethylated, sheep preimplantation embryos retain high levels of methylation until the blastocyst stage. We have cloned and sequenced sheep Dnmt1 and found it to be highly conserved with both the human and mouse homologues. Furthermore, we observed that the transcript normally expressed in adult somatic tissues is highly abundant in sheep oocytes. Throughout sheep preimplantation development the protein is retained in the cytoplasm whereas Dnmt1 transcript production declines after the embryonic genome activation at the 8-16 cell stage. Attempts to clone oocyte-specific 5' regions of Dnmt1, known to be present in the mouse and human gene, were unsuccessful. However, a novel ovine Dnmt1 exon, theoretically encoding 13 amino acids, was found to be expressed in sheep oocytes, preimplantation embryos and early fetal lineages, but not in the adult tissue. RNAi-mediated knockdown of this novel transcript resulted in embryonic developmental arrest at the late morula stage, suggesting an essential role for this isoform in sheep blastocyst formation.