Polimlje is situated in the south-western part of Serbia, in the Raska region. In the morphological and spatial functional view this is a heterogeneous area which spreads over the Lim river basin in Serbia and Montenegro. The area of the Lim river basin is 5 784 km2, whereof 1 541.3 km2 belong to the Uvac river basin. The territories of the following municipalities belong to Polimlje in Serbia: Priboj, Prijepolje, Nova Varos and Sjenica. Natural resources of the region are explored insufficiently, whereof waters, ores, pastures, meadows and forests are significant in the economic sense. The prevalence and distribution of the natural resources have been pointed out in the paper, with an emphasis on the explanation of the quality of reserves and economic justification of exploitation. The hydro energetic potential of the Uvac, the largest tributary of the Lim, is significant. The priorities and directions of the regional development have been emphasized on the basis of uneven natural resources distribution. Taking into consideration the natural potentials, agriculture (cattle breeding) and energetic should be the main stakeholders of the economic development in the region.