Abstract: 【Objective/Meaning】By grasping the situation of mutton trade between China and Australia, and exploring the trade characteristics, influencing factors, and trade potential, it would be conducive to enhance the international competitiveness of Chinese mutton and promote the development of the bilateral trade of mutton. 【Methods/Procedures】By using the UN Comtrade database, the overall situation of mutton trade between China and Australia from 1999 to 2018 was described in this paper, and then the complementarity and competitiveness of mutton trade between the two countries were analyzed by using the trade combination index (TCD), revealed comparative advantage index (RCA), and trade competitiveness index (TC). Last, the influencing factors and trade potential of mutton trade were empirically analyzed through the gravity model. 【Results/Conclusions】The results showed that the international competitiveness of Chinese mutton was relatively low, while that of Australian mutton was strong. The mutton trade between the two countries was closely linked and the bilateral mutton trade had great potential. Therefore, it was necessary to further develop China-Australia Free Trade Zone and improve the quality and international competitiveness of Chinese mutton.