Chitosan oligosaccharide (COS) is derived through deacetylation of chitin from crustacean shells. Previous studies reported the benefits of COS to gut microbiota, immunity and health of host species. In this study, 120 pregnant composite ewes were subdivided into treatment and control groups in duplicate. COS was supplemented via a loose lick to provide an estimated intake of COS @100–600 mg/d/ewe for five weeks pre-lambing until lamb marking. Body weight was recorded pre-treatment for ewes, and at lamb marking and weaning for both ewes and lambs. Serum immunity markers immunoglobulin G (IgG), immunoglobulin M (IgM), immunoglobulin A (IgA), secretory immunoglobulin A (sIgA), interleukin (IL)-2, IL10 and faecal sIgA were determined for ewes and lambs at lamb marking and weaning by enzyme-linked immunosorbent assay (ELISA). We found that COS can be incorporated in sheep feed without compromising palatability. Maternal COS supplementation did not influence the body weight of ewes or lambs. It did, however, significantly increase the concentrations of serum IL2 in ewes at marking and weaning (p < 0.001). In lambs, COS also significantly increased the IL2 concentration at making (p = 0.018) and weaning (p = 0.029) and serum IgM at marking (p < 0.001). No significant effect was observed in the concentration of any other immune marker or cytokine in either ewes or lambs. In conclusion, maternal COS supplementation significantly modulated some immunity markers in both ewes and lambs. The short duration of maternal COS supplementation and optimal seasonal conditions during the trial may explain the lack of significant body weight in ewes and lambs from the COS supplementation. Implications: Our findings indicate that COS can be incorporated in sheep feed without compromising palatability and maternal COS supplementation significantly modulated some immunity markers in both ewes and lambs, implying the functional role of COS and its use as a feed additive for improving sheep production and immunity. Findings from this study will help to develop alternative nutritional strategies to reduce the incidence of infectious diseases in sheep. COS can thus be proposed as a cost-effective functional feed targeting pregnant and lactating ewes and weaner lambs to improve sheep production.