In some parks, it's illegal to enter with horses (or mules) that don't carry your brand - this is so if the rangers find a loose animal they can return it to its owner. Horses that are run out on common range, throughout the world, are generally branded. Branding is also considered a deterrent to theft. Some equine registries, especially Warmbloods, brand horses to indicate that they have been approved for breeding.
There are two branding methods used on horses.
1. Hot branding or "traditional" branding, similar to the brands used on cattle. The brand is held against the skin just long enough to create a scar in the shape of the breeder's or owner's brand.
2. Freeze branding, cold branding or freeze marking involves using a branding iron that has been chilled. This method takes slightly longer and rather than causing a raised scar, it causes the hair to grow back white. (On grey or white horses, the brand is held on longer to permanently kill the hair follicles, but it's still much less visible. The BLM uses freeze marking on Mustangs and it's a popular means of permanent horse identification in Europe.
Some people argue that hot branding is considerably less humane than freeze marking. Hot branding proponents, however, point out that hot branding is over more quickly and it probably evens out. (Either way, I have never seen a horse suffer long lasting pain or trauma from being branded, using either method).
This Appaloosa mare belongs to wilderness outfitter Anchor D. Her brand can clearly be seen on the left side of her hindquarters.
Meanwhile, this Quarter Horse, known as "Hydi Q" has been freeze marked with her initials - likely as a deterrent to theft (Yes, horses do still get rustled, even in this day and age).