As a member of the Frizzled family, Frizzled3 (FZD3) is a receptor of the canonical Wnt signaling pathway and plays a vital role in mammalian hair follicle developmental processes.  However, its effects on wool traits are not clear.  The objectives of this study were to identify the single nucleotide polymorphisms (SNPs) and the expression patterns of FZD3 gene, and then to determine whether it affected wool traits of Chinese Merino sheep (Xinjiang Type) or not.  PCR-single stranded conformational polymorphism (PCR-SSCP) and sequencing were used to identify mutation loci, and general linear model (GLM) with SAS 9.1 was used for the association analysis between wool traits and SNPs.  Quantitative real-time PCR (qRT-PCR) was used to investigate FZD3 gene expression levels.  The results showed that six exons of FZD3 gene were amplified and two mutation loci were identified in exon 1 (NC_019459.2: g.101771685 T>C (SNP1)) and exon 3 (NC_019459.2: g.101810848, A>C (SNP2)), respectively.  Association analysis showed that SNP1 was significantly associated with mean fiber diameter (MFD) (P=0.04) and live weight (LW) (P=0.0004), SNP2 was significantly associated with greasy fleece weight (GFW) (P=0.04).  The expression level of FZD3 gene in skin tissues of the superfine wool (SF) group was significantly lower (P<0.05) than that of the fine wool (F) group.  Moreover, it had a higher expression level (P<0.01) in skin tissues than in other tissues of Chinese Merino ewes.  While, its expression level had a fluctuant expression in skin tissues at different developmental stages of embryos and born lambs, with the highest expression levels (P<0.01) at the 65th day of embryos.  Our study revealed the genetic relationship between FZD3 variants and wool traits and two identified SNPs might serve as potential and valuable genetic markers for sheep breeding and lay a molecular genetic foundation for sheep marker-assisted selection (MAS).