It is a perennial plant sometimes found in acidic ground, and in mountain pasture, throughout Europe (with the exception of some Mediterranean areas) and eastwards across much of Asia; it has also been introduced to North America.

However, the species has a wide ecological tolerance in the UK, occurring on both basic and acid soils, as well as old mining sites and spoil heaps that are contaminated with heavy metals.

Sheep's fescue is a drought-resistant grass, commonly found on poor, well-drained mineral soil.

[5] The great ability to adapt to poor soils is due to mycorrhizal fungi,[6] which increase the absorption of water and nutrients and also are potential determinants of plant community structure.

The symbiosis with fungi increases mineral, nitrogen and phosphate absorption, thanks to fungal hyphae that expand deeply in the soil and cover plant roots, increasing the exchange surface.