Dairy products play a crucial role in human nutrition as they provide essential nutrients. However, the presence of diverse microorganisms in these products can pose challenges to food safety and quality. Here, we provide a comprehensive molecular characterization of a diverse collection of lactic acid bacteria (LAB) and staphylococci isolated from raw sheep’s milk. Whole-genome sequencing, phenotypic characterization, and bioinformatics were employed to gain insight into the genetic composition and functional attributes of these bacteria. Bioinformatics analysis revealed the presence of various genetic elements. Important toxin-related genes in staphylococci that contribute to their pathogenic potential were identified and confirmed using phenotypic assays, while adherence-related genes, which are essential for attachment to host tissues, surfaces in the dairy environment, and the creation of biofilms, were also present. Interestingly, the Staphylococcus aureus isolates belonged to sequence type 5, which largely consists of methicillin-susceptible isolates that have been involved in severe nosocomial infections. Although genes encoding methicillin resistance were not identified, multiple resistance genes (RGs) conferring resistance to aminoglycosides, macrolides, and fluroquinolones were found. In contrast, LAB had few inherently present RGs and no virulence genes, suggesting their likely safe status as food additives in dairy products. LAB were also richer in bacteriocins and carbohydrate-active enzymes, indicating their potential to suppress pathogens and effectively utilize carbohydrate substrates, respectively. Additionally, mobile genetic elements, present in both LAB and staphylococci, may facilitate the acquisition and dissemination of genetic traits, including RGs, virulence genes, and metabolic factors, with implications for food quality and public health. The molecular and phenotypic characterization presented herein contributes to the effort to mitigate risks and infections (e.g., mastitis) and enhance the safety and quality of milk and products thereof.