The complaint was lodged against farmer Ken Turner of New South Wales by People for the Ethical Treatment of Animals which reportedly obtained footage from an undercover worker at the station, a media report said.
A bemused Turner said on radio, "none of them (sheep) actually told me that they were offended".
"I still have not had a sheep come to me (to complain), they did not even look offended to me. They just walked down to the paddock, grazed intently, and I did not notice any distress attached to them," Turner was quoted by Newcastle Herald as saying.
Turner said he did not know that he was offending sheep with rude words until the RSPCA came knocking on the door of his station outside Broken Hill.
Apparently the rude word words were distressing the herd.
Turner has not seen the footage alleging he sanctioned such behaviour, so he does not know what kind of rude words were apparently used.
The case has been dropped but Turner says he's annoyed the complaint took resources away from the RSPCA.
PETA said its complaint did not just involve offensive language but physical abuse, including stomping and punching of the sheep.
"If foul language were the worst that sheep in Australian shearing sheds had to endure, then no complaint would have been filed," a spokeswoman said.
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