Officers investigating the thefts in the Tweeddale area of the Borders say they believe the problem is occurring across the country.
The Scottish SPCA and the National Farmers Union are working with police on the 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 into hundreds of thousands of pounds, which has a serious impact on the farming community."
Scottish SPCA chief superintendent Mike Flynn said the charity is concerned for the welfare of the animals.
"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," he said.
Anyone with any information about the thefts can call Police Scotland on 101, Scottish SPCA's animal helpline on 03000 999 999 or Crimestoppers anonymously on 0800 555 111.