Based on the important value of folk legend itself and the important role of folk legend elements in shaping the visual image of city brand, the paper aims to discuss the extraction method of folk legend cultural elements and study the application of folk legend cultural elements in the visual image design of city brands. Extraction methods such as simplified extraction, exaggerated emphasis, decomposition and reconstruction, and form transformation, are used to refine the visual elements including graphics, words and colors from folk legend. The routes and the generated value of applying the extracted folk legend visual elements to the visual image of the city brand are discussed and combined with the design practice of applying the elements of the Khitan ancestor legend in the visual image of Pingquan city brand, so as to explore a feasible way of integrated development and mutual promotion between the cultural inheritance of folk legend and the space expansion of the visual image design of city brand. As the folk legend is rooted in the local and condenses the local original cultural gene, it can provide different and unique cultural elements for the visual image building of the city brand, avoiding the homogenization of the city brand building, improving the identification of the city image, showing the unique history and culture, improving the quality and connotation of the city, and promoting the development of the city. At the same time, applying the folk legend cultural elements to build the visual image of the city brand could help folk legend to integrate into modern life, which is of double significance to the continuation of urban historical context and the inheritance and development of the folk legend.