Initiation of hair follicle (HF) is the first and most important stage of HF morphogenesis. However the precise molecular mechanism of initiation of hair follicle remains elusive. Meanwhile, in previous study, the more attentions had been paid to the function of genes, while the roles of non-coding RNAs (such as long noncoding RNA and microRNA) had not been described. Therefore, the roles of long noncoding RNA(LncRNA) and coding RNA in sheep skin during the initiation of sheep secondary HF were integrated and analyzed, by using strand-specific RNA sequencing (ssRNA-seq).A total of 192 significant differentially expressed genes were detected, including 67 up-regulated genes and 125 down-regulated genes between stage 0 and stage 1 of HF morphogenesis during HF initiation. Only Wnt2, FGF20 were just significant differentially expressed among Wnt, Shh, Notch and BMP signaling pathways. Further expression profile analysis of lncRNAs showed that 884 novel lncRNAs were discovered in sheep skin expression profiles. A total of 15 lncRNAs with significant differential expression were detected, 6 up-regulated and 9 down-regulated. Among of differentially expressed genes and LncRNA, XLOC002437 lncRNA and potential target gene COL6A6 were all significantly down-regulated in stage 1. Furthermore, by using RNAhybrid, XLOC005698 may be as a competing endogenous RNA ''sponges" oar-miR-3955-5p activity. Gene Ontology and KEGG pathway analyses indicated that the significantly enriched pathway was peroxisome proliferator-activated receptors (PPARs) pathway (corrected P-value < 0.05), indicating that PPAR pathway is likely to play significant roles during the initiation of secondary HF.Results suggest that the key differentially expressed genes and LncRNAs may be considered as potential candidate genes for further study on the molecular mechanisms of HF initiation, as well as supplying some potential values for understanding human hair disorders.