The sheep body louse, Bovicola ovis (B. ovis), is one of the most significant ectoparasites affecting Australia’s sheep flocks. Despite this, detection methods for B. ovis infestation are limited to visual inspection and ELISA. A colourimetric loop-mediated isothermal amplification (LAMP) method was developed and evaluated for the detection of B. ovis DNA. Diagnostic sensitivity and specificity of LAMP were compared with those of visual inspection and PCR and validated using field samples collected from 22 farms. Two different DNA extraction methods using a commercial kit and a boiling method were also compared. The highest sensitivity and specificity were observed when PCR was used and DNA was extracted using a commercial kit. Compared with PCR, the LAMP assay demonstrated a sensitivity and specificity of 90% and 92% when DNA was extracted by a commercial kit and 100% and 75% when DNA was extracted by the boiling method, respectively. The LAMP test developed in this study could potentially serve as a point-of-care diagnostic tool for monitoring of sheep flocks as well as surveillance of B. ovis populations.