In this study, production, reproduction, managerial, and economic parameters obtained from data recorded for Lori-Bakhtiari flock of sheep (500 heads of breeding ewe) stationed at the sheep's Breeding Station, were employed to determine the relative economic values of and breeding objectives for an annual cycle of production, in village system in this breed of sheep. Economic value for a trait was estimated as the level of change in the profit of system as its mean increased by one unit, while the means of other traits being kept constant. The economic values were investigated in three approaches including a included to maximization profit to maximize economic efficiency and to minimize cost. The results show, live weight of (carcass weight) accounted for 94.51% while wool and manure for the remaining 5.49% of the revenue, respectivly. Feeding and management costs represented about 72.28 and 25.94% of total costs, respectively. Relative economic values for conception rate, litter size, mature ewe live weight, weight of wool, lamb survival at 6 months of age, 6-month live weight, carcass lean weight and carcass fat weight at 6 months of age were 60.52, 48.00, -0.05, 1, 56.55, 1.01, 4.61 and -0.92, respectivly for maximization of profit approach. Relative economic values from the three approaches were approximately the same. Litter size, conception rate and ewe live weight were the most important traits in the breeding objectives for ewe in the village system. Lamb survival at 6 months of age, carcass lean and fat weights were the most important traits in the breeding objectives for the lamb in the village system. Estimates of sensitivity analysis of relative economic values to changes in prices of input and output by ?20% indicated that the relative economic values of traits, relative to change in cost of input (feed and management), were of low sensitivity, while relative to change in output (carcass and carcass lean weight) indicated a relatively higher sensitivity.