Kisspeptin-Neurokinin B-Dynorphin (KNDy) cells of the arcuate nucleus (ARC) of the hypothalamus have been proposed as a critical component regulating pulsatile release of gonadotropin-releasing hormone (GnRH) neurons, including the negative feedback control of GnRH pulses by estradiol and progesterone. Current evidence in sheep and goats suggest that dynorphin released by KNDy cells acts as a “stop” signal for the pulse generator, and terminates each GnRH pulse by acting upon kappa opioid receptors (KOR). However, the precise localization of KOR, and whether they are present in KNDy cells in the sheep, is unknown. We first determined the distribution of KOR in the ovine hypothalamus using a KOR antibody whose specificity we confirmed by Western blot analyses and blocking peptide controls. Tissue sections from gonadal-intact ewes perfused during the luteal phase of the estrous cycle (n = 4) were processed for single-label immunoperoxidase detection and revealed KOR-positive cells in a number of hypothalamic regions, including the preoptic area (POA), the paraventricular nucleus (PVN), and the arcuate nucleus (ARC), areas which also contain KOR mRNA. In a second set of experiments, we determined whether KOR is co-expressed in KNDy cells in the ewe hypothalamus. Tissue sections from the same luteal-phase ewes (n = 4) were processed for dual-label immunofluorescent detection of KOR and neurokinin B (NKB). Confocal microscopic analyses showed a high degree of co-localization, with 94% of NKB cells containing KOR, while 46% of KOR cells in the ARC were double-labeled for NKB. In conclusion, a large majority of KNDy cells in the sheep ARC co-localize KOR. In addition, there are also a sizable proportion of KOR-positive cells in the ARC which do not contain NKB, and hence represent a separate subpopulation from KNDy cells. We suggest that dynorphin may exert its inhibitory control of GnRH pulse frequency by binding to postsynaptic KOR either within KNDy cells (autoregulatory actions), or by actions upon adjacent non-KNDy ARC neurons, which, in turn, may project onto KNDy and/or GnRH neurons.