The difference is in both pronunciation and meaning. “Ship” is pronounced /ʃɪp/ like “ship” with a short “i” sound, as in “sit”. It means a large boat that travels on water. “Sheep” is pronounced /ʃiːp/ with a long “ee” sound, as in “see”. It refers to the animal that gives wool. So the key difference: Ship has a short vowel sound (ɪ) Sheep has a long vowel sound (iː) That small vowel change completely changes the meaning, even though the words look almost the same.