Officers in the Borders said that hundreds of thousands of pounds worth of sheep have been stolen in the Tweeddale area since the start of the year. However, following on from earlier enquiries, it is now believed to be an issue across the whole of Scotland.
Police are now working with the Scottish SPCA and the National Farmers Union as part of their inquiry.
Chief Inspector Andrew Clark said: "In the spring of 2013 officers in the Borders noted a number of crime reports relative to the theft of sheep in this area.
However, this is a national problem and it's something that we take very seriously and we are investigating thoroughly.
"Early investigation has established the value of these thefts to run in to hundreds of thousands of pounds, which has a serious impact on the farming community.
"Officers are also working with our contacts in other agencies, including Scottish SPCA and National Farmers Union."
Scottish SPCA Chief Superintendent Mike Flynn said, "We have serious concerns for the welfare of the sheep involved in these thefts.
"Any animal taken in such circumstances is viewed purely as a commodity for onward sale and as such it is highly unlikely that the individuals involved in this practice will be taking the necessary steps to ensure their welfare, including preventing and treating disease and obtaining veterinary treatment as required.
"Anyone with any information relating to this activity should contact the police or the Scottish SPCA Animal Helpline on 03000 999 999 without delay."
Anyone with information should contact Police Scotland on 101, or make an anonymous report through Crimestoppers on 0800 555 111.