The vision released by animal rights group PETA on Thursday shows shearers punching sheep in the face, beating them on the head with shearing clips, and violently throwing them on the ground.
Injured and bloodied sheep are roughly stitched up without anaesthetic.
PETA says the abuse occurred between August 2013 and March 2014 in shearing sheds in Victoria, NSW and South Australia.
The RSPCA has launched an investigation into the "serious" allegations for potential breaches of state animal welfare laws.
"Shearing is stressful for sheep and it should be carried out by trained and competent workers," a spokeswoman said in a statement.
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Please note, some readers may find this video disturbing:
WoolProducers Australia has condemned the "unacceptable" behaviour of workers captured in the video, but says it is an isolated incident.
"We are shocked and appalled by the footage," WoolProducers Australia's president Geoff Fisken said in a statement to AAP.
"We ask all woolgrowers to take a zero tolerance approach to poor animal welfare practice and take the necessary steps to ensure rare behaviour like this ends."
Mr Fisken said the industry has invested in research and training to improve animal welfare.
The Department of Agriculture said it had full confidence the matter would be investigated appropriately by the RSPCA and state authorities.
