The present review consists of two parts. In the first part, the authors briefly describe the state of the art of breedingprogrammes for Italian dairy sheep; then they report new models for genetic evaluation and consider the problem ofgenotype x environment interaction and the impact of farming systems on the genetic merit of animals. In the secondpart new breeding goals regarding the evolution of milk quality concept and the increasing importance of functional traitsare reported. Regarding milk quality, the authors especially focus on the traits related to cheese-making ability and onthe nutraceutical aspects of milk. Among functional traits, resistance to diseases (mastitis and Scrapie) has been highlightedfor its great importance in livestock species. Finally, the perspectives of marker-assisted selection have also beenreported.