diff --git a/src/components/IssueMetadata.svelte b/src/components/IssueMetadata.svelte
deleted file mode 100644
index 7101f3a..0000000
--- a/src/components/IssueMetadata.svelte
+++ /dev/null
@@ -1,70 +0,0 @@
-<script lang="ts">
-  import type { Issue } from "@bindings/cob/issue/Issue";
-
-  import { authorForNodeId } from "@app/lib/utils";
-
-  import Border from "@app/components/Border.svelte";
-  import IssueStateBadge from "@app/components/IssueStateBadge.svelte";
-  import NodeId from "@app/components/NodeId.svelte";
-
-  interface Props {
-    issue: Issue;
-  }
-
-  const { issue }: Props = $props();
-</script>
-
-<style>
-  .divider {
-    width: 2px;
-    background-color: var(--color-fill-ghost);
-    height: calc(100% + 4px);
-    top: 0;
-    position: relative;
-  }
-  .section {
-    padding: 0.5rem;
-    font-size: var(--font-size-small);
-    display: flex;
-    flex-direction: column;
-    align-items: flex-start;
-    height: 100%;
-  }
-  .section-title {
-    margin-bottom: 0.5rem;
-    color: var(--color-foreground-dim);
-  }
-</style>
-
-<Border variant="ghost" styleGap="0">
-  <div class="section" style:min-width="8rem">
-    <div class="section-title">Status</div>
-    <IssueStateBadge state={issue.state} />
-  </div>
-
-  <div class="divider"></div>
-
-  <div class="section" style:flex="1">
-    <div class="section-title">Labels</div>
-    <div class="global-flex" style:flex-wrap="wrap">
-      {#each issue.labels as label}
-        <div class="global-counter txt-small">{label}</div>
-      {:else}
-        <span class="txt-missing">No labels.</span>
-      {/each}
-    </div>
-  </div>
-
-  <div class="divider"></div>
-
-  <div class="section" style:flex="1">
-    <div class="section-title">Assignees</div>
-    <div class="global-flex" style:flex-wrap="wrap">
-      {#each issue.assignees as assignee}
-        <NodeId {...authorForNodeId(assignee)} />
-      {:else}
-        <span class="txt-missing">Not assigned to anyone.</span>
-      {/each}
-    </div>
-  </div>
-</Border>
diff --git a/src/components/IssueTeaser.svelte b/src/components/IssueTeaser.svelte
index c6bf9dd..62a55e2 100644
--- a/src/components/IssueTeaser.svelte
+++ b/src/components/IssueTeaser.svelte
@@ -12,6 +12,7 @@
   import Icon from "./Icon.svelte";
   import Id from "./Id.svelte";
   import InlineTitle from "./InlineTitle.svelte";
+  import Label from "./Label.svelte";
   import NodeId from "./NodeId.svelte";
 
   interface Props {
@@ -91,7 +92,7 @@
   <div class="global-flex">
     {#if !compact}
       {#each issue.labels as label}
-        <div class="global-counter txt-small">{label}</div>
+        <Label {label} />
       {/each}
     {/if}
 
diff --git a/src/components/Label.svelte b/src/components/Label.svelte
new file mode 100644
index 0000000..84f3549
--- /dev/null
+++ b/src/components/Label.svelte
@@ -0,0 +1,11 @@
+<script lang="ts">
+  interface Props {
+    label: string;
+  }
+
+  const { label }: Props = $props();
+</script>
+
+<div class="global-counter txt-small" style:max-width="10rem">
+  <div class="txt-overflow" title={label}>{label}</div>
+</div>
diff --git a/src/components/LabelInput.svelte b/src/components/LabelInput.svelte
new file mode 100644
index 0000000..f6ed6b7
--- /dev/null
+++ b/src/components/LabelInput.svelte
@@ -0,0 +1,170 @@
+<script lang="ts">
+  import Icon from "@app/components/Icon.svelte";
+  import Label from "./Label.svelte";
+  import TextInput from "@app/components/TextInput.svelte";
+
+  interface Props {
+    allowedToEdit: boolean;
+    labels: string[];
+    submitInProgress: boolean;
+    save: (updatedLabels: string[]) => void;
+  }
+
+  const {
+    allowedToEdit = false,
+    labels,
+    submitInProgress = false,
+    save,
+  }: Props = $props();
+
+  let updatedLabels: string[] = $state([]);
+  let showInput: boolean = $state(false);
+  let inputValue = $state("");
+  let validationMessage: string | undefined = $state();
+  let valid: boolean = $state(false);
+
+  const sanitizedValue = $derived(inputValue.trim());
+
+  let removeToggles: Record<string, boolean> = $state({});
+
+  $effect(() => {
+    // Reset component state whenever the labels change in the parent. This
+    // happens when the issue ID changes for example when the user navigates
+    // to a different issue via the sidebar.
+    updatedLabels = labels;
+
+    showInput = false;
+    validationMessage = undefined;
+    valid = true;
+    removeToggles = {};
+  });
+
+  $effect(() => {
+    if (inputValue !== "") {
+      if (sanitizedValue.length > 0) {
+        if (updatedLabels.includes(sanitizedValue)) {
+          valid = false;
+          validationMessage = "This label is already assigned";
+        } else {
+          valid = true;
+          validationMessage = undefined;
+        }
+      }
+    } else {
+      valid = true;
+      validationMessage = "";
+    }
+  });
+
+  function addLabel() {
+    if (valid && sanitizedValue) {
+      updatedLabels = [...updatedLabels, sanitizedValue].sort();
+      inputValue = "";
+      save($state.snapshot(updatedLabels));
+      showInput = false;
+    }
+  }
+
+  function removeLabel(label: string) {
+    updatedLabels = updatedLabels.filter(x => x !== label);
+    save($state.snapshot(updatedLabels));
+    showInput = false;
+  }
+</script>
+
+<style>
+  .header {
+    font-size: var(--font-size-small);
+    margin-bottom: 0.5rem;
+    color: var(--color-foreground-dim);
+  }
+  .body {
+    display: flex;
+    align-items: center;
+    flex-wrap: wrap;
+    flex-direction: row;
+    gap: 0.5rem;
+    font-size: var(--font-size-small);
+  }
+  .validation-message {
+    display: flex;
+    align-items: center;
+    gap: 0.25rem;
+    color: var(--color-foreground-red);
+    position: relative;
+    margin-top: 0.5rem;
+  }
+  button {
+    border: 0;
+    cursor: pointer;
+    color: var(--color-foreground-default);
+    gap: 0.5rem;
+  }
+</style>
+
+<div style:width="100%">
+  <div class="global-flex" style:align-items="flex-start">
+    <div class="header">Labels</div>
+
+    {#if allowedToEdit}
+      <div class="global-flex" style:margin-left="auto">
+        {#if showInput}
+          <Icon onclick={addLabel} name="checkmark" styleCursor="pointer" />
+          <Icon
+            onclick={() => {
+              inputValue = "";
+              showInput = false;
+            }}
+            name="cross"
+            styleCursor="pointer" />
+        {:else}
+          <Icon
+            name="plus"
+            onclick={() => (showInput = true)}
+            styleCursor="pointer"></Icon>
+        {/if}
+      </div>
+    {/if}
+  </div>
+
+  <div class="body">
+    {#if allowedToEdit}
+      {#each updatedLabels as label}
+        <button
+          class="global-counter txt-small"
+          style:max-width="10rem"
+          onclick={() => (removeToggles[label] = !removeToggles[label])}>
+          <div class="txt-overflow" title={label}>{label}</div>
+          {#if removeToggles[label]}
+            <Icon name="cross" onclick={() => removeLabel(label)} />
+          {/if}
+        </button>
+      {:else}
+        <div class="txt-missing">No labels.</div>
+      {/each}
+    {:else}
+      {#each updatedLabels as label}
+        <Label {label} />
+      {:else}
+        <div class="txt-missing">No labels.</div>
+      {/each}
+    {/if}
+  </div>
+
+  {#if showInput}
+    <div style:margin-top="0.5rem">
+      <TextInput
+        autofocus
+        {valid}
+        disabled={submitInProgress}
+        placeholder="Add label"
+        bind:value={inputValue}
+        onSubmit={addLabel} />
+      {#if !valid && validationMessage}
+        <div class="validation-message">
+          <Icon name="warning" />{validationMessage}
+        </div>
+      {/if}
+    </div>
+  {/if}
+</div>
diff --git a/src/views/repo/Issue.svelte b/src/views/repo/Issue.svelte
index 1da20f0..25a3688 100644
--- a/src/views/repo/Issue.svelte
+++ b/src/views/repo/Issue.svelte
@@ -12,19 +12,25 @@
 
   import * as roles from "@app/lib/roles";
   import { invoke } from "@app/lib/invoke";
-  import { publicKeyFromDid, scrollIntoView } from "@app/lib/utils";
+  import {
+    publicKeyFromDid,
+    scrollIntoView,
+    authorForNodeId,
+  } from "@app/lib/utils";
 
   import { announce } from "@app/components/AnnounceSwitch.svelte";
 
+  import Border from "@app/components/Border.svelte";
   import CommentComponent from "@app/components/Comment.svelte";
   import CommentToggleInput from "@app/components/CommentToggleInput.svelte";
   import CopyableId from "@app/components/CopyableId.svelte";
   import Icon from "@app/components/Icon.svelte";
   import InlineTitle from "@app/components/InlineTitle.svelte";
-  import IssueMetadata from "@app/components/IssueMetadata.svelte";
   import IssueSecondColumn from "@app/components/IssueSecondColumn.svelte";
+  import IssueStateBadge from "@app/components/IssueStateBadge.svelte";
   import IssueStateButton from "@app/components/IssueStateButton.svelte";
   import IssueTimelineLifecycleAction from "@app/components/IssueTimelineLifecycleAction.svelte";
+  import LabelInput from "@app/components/LabelInput.svelte";
   import Link from "@app/components/Link.svelte";
   import NodeId from "@app/components/NodeId.svelte";
   import TextInput from "@app/components/TextInput.svelte";
@@ -54,26 +60,48 @@
   /* eslint-enable prefer-const */
 
   const issues = $state(initialIssues);
+
   let topLevelReplyOpen = $state(false);
   let editingTitle = $state(false);
-  let updatedTitle = $state(issue.title);
+  let updatedTitle = $state("");
+  let labelSaveInProgress: boolean = $state(false);
 
-  // The view doesn't get destroyed when we switch between different issues in
-  // the second column and because of that the top-level state gets retained
-  // when the issue changes. This reactive statement makes sure we always load
-  // the new issue and reset the state to defaults.
-  let issueId = issue.id;
   $effect(() => {
-    if (issueId !== issue.id) {
-      issueId = issue.id;
-      topLevelReplyOpen = false;
-      editingTitle = false;
-      updatedTitle = issue.title;
-    }
+    // The component doesn't get destroyed when we switch between different
+    // issues in the second column and because of that the top-level state
+    // gets retained when the issue changes. This reactive statement makes
+    // sure we always reset the state to defaults.
+
+    // eslint-disable-next-line @typescript-eslint/no-unused-expressions
+    issue.id;
+
+    topLevelReplyOpen = false;
+    editingTitle = false;
+    updatedTitle = issue.title;
   });
 
   const project = $derived(repo.payloads["xyz.radicle.project"]!);
 
+  async function saveLabels(labels: string[]) {
+    try {
+      labelSaveInProgress = true;
+      await invoke("edit_issue", {
+        rid: repo.rid,
+        cobId: issue.id,
+        action: {
+          type: "label",
+          labels,
+        },
+        opts: { announce: $announce },
+      });
+    } catch (error) {
+      console.error("Editing labels failed", error);
+    } finally {
+      labelSaveInProgress = false;
+      await reload();
+    }
+  }
+
   async function toggleReply() {
     topLevelReplyOpen = !topLevelReplyOpen;
     if (!topLevelReplyOpen) {
@@ -293,6 +321,26 @@
     margin-left: 1rem;
     align-items: center;
   }
+
+  .metadata-divider {
+    width: 2px;
+    background-color: var(--color-fill-ghost);
+    height: calc(100% + 4px);
+    top: 0;
+    position: relative;
+  }
+  .metadata-section {
+    padding: 0.5rem;
+    font-size: var(--font-size-small);
+    display: flex;
+    flex-direction: column;
+    align-items: flex-start;
+    height: 100%;
+  }
+  .metadata-section-title {
+    margin-bottom: 0.5rem;
+    color: var(--color-foreground-dim);
+  }
 </style>
 
 <Layout>
@@ -386,7 +434,39 @@
       {/if}
     </div>
 
-    <IssueMetadata {issue} />
+    <Border variant="ghost" styleGap="0">
+      <div class="metadata-section" style:min-width="8rem">
+        <div class="metadata-section-title">Status</div>
+        <IssueStateBadge state={issue.state} />
+      </div>
+
+      <div class="metadata-divider"></div>
+
+      <div class="metadata-section" style:flex="1">
+        <LabelInput
+          allowedToEdit={!!roles.isDelegateOrAuthor(
+            config.publicKey,
+            repo.delegates.map(delegate => delegate.did),
+            issue.body.author.did,
+          )}
+          labels={issue.labels}
+          submitInProgress={labelSaveInProgress}
+          save={saveLabels} />
+      </div>
+
+      <div class="metadata-divider"></div>
+
+      <div class="metadata-section" style:flex="1">
+        <div class="metadata-section-title">Assignees</div>
+        <div class="global-flex" style:flex-wrap="wrap">
+          {#each issue.assignees as assignee}
+            <NodeId {...authorForNodeId(assignee)} />
+          {:else}
+            <span class="txt-missing">Not assigned to anyone.</span>
+          {/each}
+        </div>
+      </div>
+    </Border>
 
     <div class="issue-body">
       <CommentComponent