Overtourism is one of the biggest challenges of modern tourism. Increasing number of tourist arrivals in destinations is leading to numerous negative consequences for the locals and the tourists themselves. The appearance of overtourism is a result of numerous trends that made traveling easier and more affordable. A decrease in travel costs, the emergence of sharing economy, various social and political trends and the widespread use of Internet and social media are the essential drivers of overtourism development. Overtourism and its impacts are evident in a growing number of destinations including Barcelona and Dubrovnik, two cities that have been experiencing accelerated tourism development for years. The aim of this master thesis is to define and explain the most significant impacts of overtourism in Barcelona and Dubrovnik and to determine its role in their future tourism development. A thorough analysis of those impacts and all the changes that have occurred in the two cities implies that both Barcelona and Dubrovnik are experiencing a plethora of detrimental effects caused by overtourism. Its expansion in these two cities has caused environmental problems, infrastructural and economic changes and has dramatically decreased the quality of life for the residents. Overtourism will bring many new challenges for these cities in the future and they can only be overcome with a participation of every stakeholder involved.