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The incident took place at a mutton shop in the Gundavali area of the town on Wednesday, the official said.
The shop owner had purchased 70 goats for Rs 6 lakh and kept them in a room on Tuesday night. People in the locality heard cries of the animals early next morning, following which the room was opened and 65 animals were found dead, it was stated.
Officials of the animal husbandry department rushed to the scene and took samples of two of the dead goats and sent them for post-mortem and the reports revealed that they had suffocated to death, he said.
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Meanwhile, Thane district animal husbandry officer Dr G G Chandore said that the goats were kept in a dingy room, which had no proper ventilation with only a shutter.
District officials are now supervising proper disposal of the carcasses to avoid the spread of any disease, he said, adding that the incident is being probed.