Abstract: Taking the mutton sheep weather index insurance in Xilingol League as an example, this paper reviews the definition of mutton sheep weather index insurance and its product design. Combined with the local conditions of the mutton sheep husbandry industry in Xilingol League, the case study method is adopted to evaluate the application outcomes and prospects of mutton sheep weather index insurance in the local mutton sheep breeding sector from four dimensions: problems and causes, objectives and approaches, design and optimization, as well as policies and incentives. The study reveals that mutton sheep weather index insurance delivers effective risk protection for the mutton sheep husbandry industry in Xilingol League and plays a vital role in mitigating losses caused by natural disasters and encouraging herdsmen to participate in insurance schemes. Further efforts should be made to improve the density of meteorological station networks, add indicators for moderate disasters, implement measures to reduce basis risk, scale up science popularization and publicity, and introduce positive incentives for insurance companies, so as to further enhance the applicability of mutton sheep weather index insurance in pastoral areas. This research offers solutions for grassland pastoral regions confronting similar challenges and facilitates the high-quality development of animal husbandry in China.