The objective of this study was to evaluate the occurrence of mycoflora in 30 samples of healthy goat's hair and sheep wool collected from different localities in Taif, Saudi Arabia, and the ability of some fungal isolates for keratinase activities. Sixty four species belonging to 28 genera were collected from the two substrates. The wool of sheep was polluted with fungi than goat hairs, and contained high total counts and number of fungal genera and species. Nine species of true dermatophytes isolated belonged to Microsporum (3 species) and Trichophyton (6 species). Several keratinophilic species were isolated of which, Chrysosporium indicum, Chrysosporium keratinophilum and Chrysosporium tropicum were the most prevalent. The commonest saprophytes in order of frequency were members of the genera, Aspergillus, Penicillium, Alternaria and Cochliobolus. In addition, the other genera found included Acremonium, Chaetomum, Cladosporium, Cochliobolus, Fusarium, Mucor, Paecilomyces, Phoma, Rhizopus, Scopulariopsis, Stachybotrys, Trichoderma and others. Five species from 20 tested isolates (Aspergillus niger, C. keratinophilum, C. tropicum, Microsporum gypseum and Trichoderma viride) had high keratinase activity. The results of this study indicate that both goat hair and sheep wool provide a suitable habitat for dermatophytes and other keratinophilic fungi. Most of these fungi play an important role in the degradation of keratin substrates, so that they can help preserve the environment and reduce pollution.