Competition among tourist destinations is becoming more prevalent as many destinations offer the same or similar attractions, which is why destination branding is becoming one of the primary goals of destination management and marketing. A brand has also become an important factor because it gives added value and commits to providing potential tourists with experience of something special in a specific destination. Therefore, it is important to create a perception of distinctiveness of a destination in the minds of tourists. Branding allows a tourist destination to achieve numerous economic effects, primarily reflected in the increase in the number of tourists, development of business, as well as in attracting new investments. Previous research conducted in our country has not sufficiently addressed tourist destination branding, which directed this research paper toward the challenges of branding tourist destinations in Serbia, with special reference to Prolom Banja - one of the destinations specializing in health tourism. This research aims to determine tourist perception of Prolom Banja, as well as to identify key elements that can influence the branding of Prolom Banja as a destination specializing in health tourism. The study was conducted in February 2019 using the survey method - questionnaire technique. The study sample consisted of 195 respondents. Using optimal statistical methods, the collected data were analyzed and the results of the research were presented. The findings show that tourists have a positive perception of Prolom Banja, while the healing Prolom water, employees, undisturbed natural beauty, wellness, and treatment center offer have been identified as significant elements that can influence the branding of Prolom Banja. Implications, research limitations and suggestions for future research were also presented.