Sheep constitute an important source of zoonotic pathogens as Shiga toxin-producing Escherichia coli (STEC). In this study, the prevalence, serotypes and virulence profiles of STEC were investigated among 130 healthy sheep from small and medium farms in southern Brazil. STEC was isolated from 65 (50%) of the tested animals and detected in all flocks. A total of 70 STEC isolates were characterized, and belonged to 23 different O:H serotypes, many of which associated with human disease, including hemolytic-uremic syndrome (HUS). Among the serotypes identified, O76:H19 and O65:H- were the most common, and O75:H14 and O169:H7 have not been previously reported in STEC strains. Most of STEC isolates harbored only stx1, whereas the Stx2b subtype was the most common among those carrying stx2. Enterohemolysin (ehxA) and intimin (eae) genes were detected in 61 (87.1%) and four (5.7%) isolates, respectively. Genes encoding putative adhesins (saa, iha, lpfO113) and toxins (subAB and cdtV) were also observed. The majority of the isolates displayed virulence features related to pathogenesis of STEC, such as adherence to epithelial cells, high cytotoxicity and enterohemolytic activity. Ovine STEC isolates belonged mostly to phylogenetic group B1. PFGE revealed particular clones distributed in some farms, as well as variations in the degree of genetic similarity within serotypes examined. In conclusion, STEC are widely distributed in southern Brazilian sheep, and belonged mainly to serotypes that are not commonly reported in other regions, such as O76:H19 and O65:H-. A geographical variation in the distribution of STEC serotypes seems to occur in sheep.