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Background Sheeppox (SPP) and goatpox (GTP) caused by sheeppox virus (SPPV) and goatpox virus (GTPV), respectively of the genus Capripoxvirus in the family Poxviridae, are severely afflicting small ruminants’ production systems in Africa and Asia. In endemic areas, SPP and GTP are controlled using vaccination with live attenuated vaccines derived from SPPV, GTPV or Lumpy skin disease virus (LSDV). Sometimes outbreaks occur following vaccination. In order to successfully control the spread of the virus, it is essential to identify whether the animals were infected by the field strain and the vaccine did not provide sufficient protection. Alternatively, in some cases the vaccine strain may cause adverse reactions in vaccinated animals or in rare occasions, re-gain virulence. Thus, diagnostic tools for differentiation of virulent strains from attenuated vaccine strains of the virus are needed. The aim of this study was to identify an appropriate diagnostic target region in the capripoxvirus genome by comparing the genomic sequences of SPPV field isolates with those of the most widely used SPP vaccine strains. Results A unique 84 base pair nucleotide deletion located between the DNA ligase gene and the VARV B22R homologue gene was found only in SPPV vaccines derived from the Romanian and Yugoslavian RM/65 strains and absent in SPPV field isolates originated from various geographical locations of Asia and Africa. In addition, we developed and evaluated a conventional PCR assay, exploiting the targeted intergenic region to differentiate SPPV vaccine virus from field isolates. The assay produced an amplicon size of 218 bp for the vaccine strains, while the SPPV field isolates resulted in a 302 bp PCR fragment. The assay showed good sensitivity and specificity, and the results were in full agreement with the sequencing data of the PCR amplicons. Conclusion The developed assay is an improvement of currently existing diagnostic tools and, when combined with a capripox virus species-specific assay, will enhance SPP and GTP diagnosis and surveillance and facilitate epidemiological investigations in countries using live attenuated SPP vaccines. In addition, for laboratories with limited resources, the assay provides a simple and cost-effective alternative for sequencing. Electronic supplementary material The online version of this article (10.1186/s12985-018-0969-8) contains supplementary material, which is available to authorized users.