Moisture in greasy wool is associated with wool yellowing, fleece rot and fly strike, whereas the high moisture content of wool fabric is related to desired woollen fabric traits. This paper reports on a simple gravimetric method of determining greasy and clean wool moisture contents to determine fleece moisture heritability. The moisture index of greasy wool has a heritability of 0.37 ± 0.04 and phenotypic correlations of –0.31 ± 0.02 with yield, 0.69 ± 0.01 with suint index and 0.50 ± 0.01 with Methylene Blue absorption. The moisture index of greasy wool was strongly genetically correlated with yield (–0.48 ± 0.06), suint index (0.93 ± 0.03), Methylene Blue absorption (0.92 ± 0.03) but not significantly genetically correlated with clean wool moisture absorption (0.18 ± 044). Moisture absorption of clean wool has a very low heritability of 0.02 ± 0.03. The correlations between moisture index and suint index suggest that greasy fleece moisture index is primarily determined by suint index. The implications of variation in the moisture index of wool on fleece rot and fly strike are discussed.