The community event is a part of the town's Fringe Festival and the theme was chosen to tie in with the Shakespeare play A Midsummer Night’s Dream, which is running during the fortnight of events.
A spokesperson for the organisers said: "The carnival on Saturday June 17 is also the opening day of the Fringe Festival, meaning the town will come alive with events including theatre, comedy, music, and talks; some of which are ticketed - these can be purchased on the Ludlow Fringe website and some are free and family-friendly."
The carnival parade returned last year after a 10-year absence and was hailed a "great success and was enjoyed by all who took part and those that watched enthusiastically along the town streets".
Ludlow Fringe has added a new member to their team - Anne Pitts has an artistic background and she intends to build on the success of last year and has been busy with local schools, community groups and townsfolk who have been eagerly creating costumes and props for the carnival.
"It’s not too late to join in either, simply contact Anne through the Fringe website," said the spokesperson.
The parade itself will leave Ludlow Brewery at 4.30pm to wend its colourful and musical way through Ludlow, culminating at the famous Ludlow Castle, where participants enter the outer bailey and celebrate their costume achievements with each other.
Anne said: “The carnival will be a celebration of community and creativity for everyone in and around Ludlow and there’s still time to join in!
"I encourage you to let your imagination go wild in creating a costume and I look forward to meeting everyone from the local area as we celebrate the town. Frankly, the more people that take part the merrier it will be!”