Located in the northern Wimmera region, Sheep Hills is 271 km north-west of Melbourne.

[3] The locality is situated on the railway line south-east of Warracknabeal, north of Minyip.

[4] The original inhabitants of the area around Sheep Hills were the Wotjobaluk, an Aboriginal Australian people.

[4] The population boosted in the mid-1870s when many migrants, mostly German and Scottish, began farming in the area.

[4] In 1886 the railway from Minyip was extended to Warracknabeal, and many settled around the station, forming the township under the name of Sheep Hills.