In this study, PCR-RFLP method was established according to a novel SNP site (C218T) within the intron 4 of sheep insulin-like growth factor binding proteins-3 (IGFBP-3) gene. Using this method, 353 Chinese Merino sheeps (Xinjiang Junken type) were tested and illustrated three unique binding genotypes of CC (249 bp), CT (249/216/33 bp) and TT (216/33bp). Frequencies of the genotype CC, CT, TT were 0.52, 0.42, 0.07, respectively, and frequencies of the allele C, T were 0.72, 0.28, respectively. Different genotypes slightly affected several wool traits of Chinese Merino sheeps. Staple length (SL) in individuals of genotype CC was significantly shorter than that in individuals of genotype TT (P<0.05), follicle density in individuals of genotype CC was significantly higher than that in individuals of genotype CT and TT (P<0.05).