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A 184 kb gap in an ovine MHC physical map was successfully closed by identification of two overlapping clones (304C7 and 222G18) from a Chinese fine wool merino sheep BAC library. The location and tiling path of the two clones were confirmed by BAC-end sequencing and PCR amplification of loci in overlapping regions. Full-length sequencing of the clones identified 13 novel ovine genes in the gap between loci Notch4 and Btnl2, and eight of them belonging to the Butyrophilin-like (Btn-like or Btnl) gene family. The scattered distribution of the Btnl gene cluster at the gap provided a clue to explain the difficulties previously experienced in closing the gap. Completed BAC contigs of the ovine MHC will facilitate sequencing of the entire ovine leukocyte antigen (OLA) region, providing detailed information for comparative studies of MHC evolution.