This research is conducted to determine impacts of tourism development on the demographic image of selected small towns in Serbia. Analyzing the following indicatorstourism potential, the share of inhabitants employed in the tourism industry, tourist turnover, and tradition in tourism, the group of 23 small towns is singled out. Further, the selected small towns with dominant tourism function are observed within four tourism clusters. Demographic characteristics of these urban settlements are analyzed through population indicators: total population increase/decrease, age and sex structure, economic activity, education structure, etc., according to the latest available data. The level of local population involvement in tourism is examined, as well as the influence of these small towns on the immediate rural surroundings. The results of conducted analysis show that tourism has an important impact on demographic development in several observed small towns. In the case of other selected small towns, the tourism influence on population increase or migration is stagnating. Despite that, increasing number of employed in the tourism industry is recorded, which implies that tourism is recognized within local community as an activity that could contribute to the development of small towns in Serbia.