Mycoplasma agalactiae (M. agalactiae) is one of the main causes of contagious agalactia, an infectious syndrome of sheep and goats in Khuzestan province –southwest of Iran that is characterized by mastitis and subsequent failure of milk production, arthritis, abortion and keratoconjunctivitis. This study was carried out to isolation and identification of M. agalactiae with culture and polymerase chain reaction (PCR) method from sheep in Khuzestan province, Iran. A total of 91 samples were collected from milk secretion, eye, ear, nose and joint exudates of sheep. All samples were cultured in PPLO broth supplemented for isolation of M. agalaciae. Extraction of the DNA of bacteria was done by phenol/chloroform method and the PCR assay was applied for detection of Mycoplasma genus in 163bp fragment of 16S rRNA gene and M. agalactiae in 375bp fragment of lipoprotein gene from culture as same as in clinical samples. Out of the 91 samples, 34(37.36%) cultures were shown positive and typical Mycoplasma colonies in PPLO agar culture diagnostic method and 47(51.65%) were scored positive by Mycoplasma genus PCR, 8(8.79%) of the samples were scored positive by using M. agalactiae PCR as diagnostic method. Out of the 91 samples, 26 samples were shown both positive in the culture and PCR, 5 samples were shown both positive in the culture, MPCR and MAPCR. 15 samples were negative in the culture and positive in PCR whereas only 3 samples were positive in culture and negative in PCR. The results showed that the more isolations of M. agalactiae were taken from eye and less in ear and nose samples. M. agalactiae was one of the main factors of contagious agalactia that was detected for the first time from sheep in Khuzestan province.