During past few years, the quality of hand-woven carpets has declined as a result of wide-spread use of slip wool. Consequently the international reputation of Iranian carpet industry has suffered a loss. This experiment was conducted at laboratory level to determine the extent of damage to sheep wool and follicles using dewooling chemicals. Comparisons were made to determine the effect of dewooling chemical common in Iran using 5, 10 and 15 percent (groups 1,2,3) sodium sulfide and dewooling chemical common in Australia including 1,3 and 5 percent sodium hydroxide on wool and follicle characteristics of 350 small sheep skin pieces. Wool was collected from skin pieces after chemicals were applied on flesh side of the skin. To collect wool from skin pieces of control group (group 7), a small laboratory clipping machine was used. Skin samples were collected from skin pieces using a trephine punch and kept in buffered formalin. Duncan’s new multiple range test was used to compare the means of groups based on a completely randomized design. Results indicated that the average time needed to collect wool from skin for groups 1,2,3,4,5 and 6 was 114.7±2.1, 103.7±0.42, 93.0±3.5, 99.5±2.1, 80.3±10.0 and 58.0±2.7 minutes. There was a significant (P<0.05) difference between groups. Average fibre diameter of groups 1,2,3,4,5,6 and 7 was 37.5±5.7, 37.1±3.2, 37.4±4.7, 35.4±2.7, 35.1±3.0, 36.1±2.3 and 36.3±2.7 am. Average staple length of groups 1,2,3,4,5,6 and 7 was 9.0±0.92, 9.2±1.11, 9.1±0.9, 9.2±0.43, 8.9±0.45, 9.1±0.22 and 8.9±0.56 cm respectively. Average S/P ratio for groups 1,2,3,4, 5,6 and 7 was 4.5±0.42, 4.7±0.25, 4.4±0.80, 4.6±1.05, 4.2±0.43, 4.3±0.32 and 4.2±0.55 respectively.