diff --git a/deltas/WildAnimals/prefabs/animals/sheep.prefab b/deltas/WildAnimals/prefabs/animals/sheep.prefab
new file mode 100644
index 0000000..5cbcdf2
--- /dev/null
+++ b/deltas/WildAnimals/prefabs/animals/sheep.prefab
@@ -0,0 +1,7 @@
+{
+    "Shearable": {
+      "lastShearingTimestamp": -1,
+      "isSheared": false,
+      "dropItem":"WildAnimals:wool"
+    }
+}
diff --git a/src/main/java/org/terasology/manualLabor/components/ShearableComponent.java b/src/main/java/org/terasology/manualLabor/components/ShearableComponent.java
new file mode 100644
index 0000000..8a34ef8
--- /dev/null
+++ b/src/main/java/org/terasology/manualLabor/components/ShearableComponent.java
@@ -0,0 +1,27 @@
+// Copyright 2021 The Terasology Foundation
+// SPDX-License-Identifier: Apache-2.0
+
+package org.terasology.manualLabor.components;
+
+import org.terasology.engine.entitySystem.Component;
+
+/**
+ * Attached to components that can be sheared.
+ */
+public class ShearableComponent implements Component {
+
+    /**
+     * Stores the last time the shearing took place. Default -1 for no previous shearing event.
+     */
+    public long lastShearingTimestamp = -1;
+
+    /**
+     * Stores the current state of shearing i.e. whether sheared or not.
+     */
+    public boolean isSheared;
+
+    /**
+     * URI of item to be dropped in event of shearing
+     */
+    public String dropItemURI;
+}
diff --git a/src/main/java/org/terasology/manualLabor/systems/ShearingSystem.java b/src/main/java/org/terasology/manualLabor/systems/ShearingSystem.java
new file mode 100644
index 0000000..3883a00
--- /dev/null
+++ b/src/main/java/org/terasology/manualLabor/systems/ShearingSystem.java
@@ -0,0 +1,111 @@
+// Copyright 2021 The Terasology Foundation
+// SPDX-License-Identifier: Apache-2.0
+
+package org.terasology.manualLabor.systems;
+
+import org.slf4j.Logger;
+import org.slf4j.LoggerFactory;
+import org.terasology.engine.core.Time;
+import org.terasology.engine.entitySystem.entity.EntityManager;
+import org.terasology.engine.entitySystem.entity.EntityRef;
+import org.terasology.engine.entitySystem.event.ReceiveEvent;
+import org.terasology.engine.entitySystem.prefab.Prefab;
+import org.terasology.engine.entitySystem.systems.BaseComponentSystem;
+import org.terasology.engine.entitySystem.systems.RegisterSystem;
+import org.terasology.engine.logic.characters.events.AttackEvent;
+import org.terasology.engine.logic.delay.DelayManager;
+import org.terasology.engine.logic.delay.PeriodicActionTriggeredEvent;
+import org.terasology.engine.registry.In;
+import org.terasology.engine.rendering.assets.material.Material;
+import org.terasology.engine.rendering.assets.skeletalmesh.SkeletalMesh;
+import org.terasology.engine.rendering.logic.SkeletalMeshComponent;
+import org.terasology.gestalt.assets.ResourceUrn;
+import org.terasology.gestalt.assets.management.AssetManager;
+import org.terasology.manualLabor.components.ShearableComponent;
+
+import java.util.Optional;
+
+/**
+ * This system is responsible for handling the logic for shearing. A sheep shearing cycle consists of a shearing switching to the model for
+ * sheared state, dropping an item in event of shearing and switching back to the non sheared state after a certain amount of time.
+ */
+@RegisterSystem
+public class ShearingSystem extends BaseComponentSystem {
+    public static final String SHEARING_ITEM = "ManualLabor:CrudeShears";
+    public static final int HAIR_REGROWTH_TIME = 3 * 60 * 1000; // 3 minutes in ms
+    public static final String HAIR_REGROWTH_ACTION_ID = "ManualLabor:HairRegrowthAction";
+    public static final String SHEARED_SHEEP_MESH = "WildAnimals:shearedSheep";
+    public static final String SHEARED_SHEEP_MATERIAL = "WildAnimals:shearedSheepSkin";
+    public static final String SHEEP_MESH = "WildAnimals:sheep";
+    public static final String SHEEP_MATERIAL = "WildAnimals:sheepSkin";
+    private static final Logger logger = LoggerFactory.getLogger(ShearingSystem.class);
+
+    @In
+    protected Time time;
+
+    @In
+    private EntityManager entityManager;
+
+    @In
+    private AssetManager assetManager;
+
+    @In
+    private DelayManager delayManager;
+
+    /**
+     * Executes changes occurring in event of shearing.
+     *
+     * @param entityRef Entity being sheared
+     */
+    @ReceiveEvent(components = {ShearableComponent.class})
+    public void onAttack(AttackEvent event, EntityRef entityRef) {
+        ShearableComponent component = entityRef.getComponent(ShearableComponent.class);
+        EntityRef heldItem = event.getDirectCause();
+        Prefab parentPrefab = heldItem.getParentPrefab();
+        if (parentPrefab != null && !component.isSheared && parentPrefab.getUrn().equals(new ResourceUrn(SHEARING_ITEM))) {
+            component.isSheared = true;
+            component.lastShearingTimestamp = time.getGameTimeInMs();
+            delayManager.addPeriodicAction(entityRef, HAIR_REGROWTH_ACTION_ID, 0, HAIR_REGROWTH_TIME / 20);
+            switchPrefab(entityRef, SHEARED_SHEEP_MESH, SHEARED_SHEEP_MATERIAL);
+        }
+    }
+
+    /**
+     * Periodically checks if enough time has elapsed for hair regrowth and executes events to regrow.
+     *
+     * @param entity Entity to regrow hair
+     */
+    @ReceiveEvent
+    public void onPeriodicActionTriggered(PeriodicActionTriggeredEvent event, EntityRef entity) {
+        if (event.getActionId().equals(HAIR_REGROWTH_ACTION_ID)) {
+            ShearableComponent shearableComponent = entity.getComponent(ShearableComponent.class);
+            if (shearableComponent.isSheared && (time.getGameTimeInMs() - shearableComponent.lastShearingTimestamp) > HAIR_REGROWTH_TIME) {
+                shearableComponent.isSheared = false;
+                delayManager.cancelPeriodicAction(entity, HAIR_REGROWTH_ACTION_ID);
+                switchPrefab(entity, SHEEP_MESH, SHEEP_MATERIAL);
+            }
+        }
+    }
+
+    /**
+     * Switches the model for the provided entity
+     *
+     * @param entity entity whose model is to be switched
+     * @param meshURI mesh URI for the new model
+     * @param materialURI material URI for the new model
+     */
+    private void switchPrefab(EntityRef entity, String meshURI, String materialURI) {
+        SkeletalMeshComponent skeletalMeshComponent = entity.getComponent(SkeletalMeshComponent.class);
+        if (skeletalMeshComponent != null) {
+            Optional<SkeletalMesh> skeletalMesh = assetManager.getAsset(meshURI,
+                    SkeletalMesh.class);
+            Optional<Material> shearedMaterial = assetManager.getAsset(materialURI,
+                    Material.class);
+            if (skeletalMesh.isPresent() && shearedMaterial.isPresent()) {
+                skeletalMeshComponent.mesh = skeletalMesh.get();
+                skeletalMeshComponent.material = shearedMaterial.get();
+            }
+            entity.saveComponent(skeletalMeshComponent);
+        }
+    }
+}