Intraosseous lipomas are rare benign tumours of the bone. The current report describes a large intraosseous lipoma located in the right rib cage of a 4‐year‐old, female Absheron sheep, observed during a pre‐mortem inspection at an abattoir. This represents the first documented case of intraosseous lipoma in sheep and the sixth reported case in animals overall. The mass exhibited a lobulated structure and firm consistency, with a greasy appearance. Histopathological examinations, in conjunction with macroscopic features, suggested the diagnosis of osteolipoma, characterised by mature yellow adipocytes and residual bony trabeculae.