diff --git a/frontend/src/__tests__/cypress/cypress/pages/modelRegistry/modelVersionDetails.ts b/frontend/src/__tests__/cypress/cypress/pages/modelRegistry/modelVersionDetails.ts
index 08fd807b70..8361a47ae5 100644
--- a/frontend/src/__tests__/cypress/cypress/pages/modelRegistry/modelVersionDetails.ts
+++ b/frontend/src/__tests__/cypress/cypress/pages/modelRegistry/modelVersionDetails.ts
@@ -126,6 +126,30 @@ class ModelVersionDetails {
       this.findTable().find(`[data-label=Key]`).contains(name).parents('tr'),
     );
   }
+
+  findEditLabelsButton() {
+    return cy.findByTestId('editable-labels-group-edit');
+  }
+
+  findAddLabelButton() {
+    return cy.findByTestId('add-label-button');
+  }
+
+  findLabelInput(label: string) {
+    return cy.findByTestId(`edit-label-input-${label}`);
+  }
+
+  findLabel(label: string) {
+    return cy.findByTestId(`editable-label-${label}`);
+  }
+
+  findLabelErrorAlert() {
+    return cy.findByTestId('label-error-alert');
+  }
+
+  findSaveLabelsButton() {
+    return cy.findByTestId('editable-labels-group-save');
+  }
 }
 
 class PropertyRow extends TableRow {}
diff --git a/frontend/src/__tests__/cypress/cypress/tests/mocked/modelRegistry/modelVersionDetails.cy.ts b/frontend/src/__tests__/cypress/cypress/tests/mocked/modelRegistry/modelVersionDetails.cy.ts
index 3a0e6917e0..200a41253e 100644
--- a/frontend/src/__tests__/cypress/cypress/tests/mocked/modelRegistry/modelVersionDetails.cy.ts
+++ b/frontend/src/__tests__/cypress/cypress/tests/mocked/modelRegistry/modelVersionDetails.cy.ts
@@ -238,19 +238,6 @@ describe('Model version details', () => {
     it('Model version details tab', () => {
       modelVersionDetails.findVersionId().contains('1');
       modelVersionDetails.findDescription().should('have.text', 'Description of model version');
-      modelVersionDetails.findMoreLabelsButton().contains('6 more');
-      modelVersionDetails.findMoreLabelsButton().click();
-      modelVersionDetails.shouldContainsModalLabels([
-        'Testing label',
-        'Financial',
-        'Financial data',
-        'Fraud detection',
-        'Machine learning',
-        'Next data to be overflow',
-        'Label x',
-        'Label y',
-        'Label z',
-      ]);
       modelVersionDetails.findStorageEndpoint().contains('test-endpoint');
       modelVersionDetails.findStorageRegion().contains('test-region');
       modelVersionDetails.findStorageBucket().contains('test-bucket');
@@ -346,6 +333,31 @@ describe('Model version details', () => {
       modelVersionDetails.findModelVersionDropdownItem('Version 2').click();
       modelVersionDetails.findVersionId().contains('2');
     });
+
+    it('should handle label editing', () => {
+      modelVersionDetails.findEditLabelsButton().click();
+
+      modelVersionDetails.findAddLabelButton().click();
+
+      modelVersionDetails.findLabel('New Label').should('exist');
+
+      modelVersionDetails.findLabel('New Label').click().type('Updated Label{enter}');
+
+      modelVersionDetails.findSaveLabelsButton().should('exist').click();
+    });
+
+    it('should handle label validation', () => {
+      modelVersionDetails.findEditLabelsButton().click();
+
+      modelVersionDetails.findLabelInput('Testing label').click();
+
+      modelVersionDetails.findLabelInput('Testing label').should('exist').should('be.visible');
+
+      const longLabel = 'a'.repeat(64);
+      modelVersionDetails.findLabelInput('Testing label').clear().type(`${longLabel}{enter}`);
+      modelVersionDetails.findLabelErrorAlert().should('contain', "can't exceed 63 characters");
+      modelVersionDetails.findLabel('New Label').should('not.exist');
+    });
   });
 
   describe('Registered deployments tab', () => {
diff --git a/frontend/src/components/DashboardDescriptionListGroup.tsx b/frontend/src/components/DashboardDescriptionListGroup.tsx
index 607f3b0920..9282eb8dc6 100644
--- a/frontend/src/components/DashboardDescriptionListGroup.tsx
+++ b/frontend/src/components/DashboardDescriptionListGroup.tsx
@@ -26,6 +26,7 @@ type EditableProps = {
   editButtonTestId?: string;
   saveButtonTestId?: string;
   cancelButtonTestId?: string;
+  discardButtonTestId?: string;
 };
 
 export type DashboardDescriptionListGroupProps = {
@@ -36,6 +37,7 @@ export type DashboardDescriptionListGroupProps = {
   contentWhenEmpty?: React.ReactNode;
   children: React.ReactNode;
   groupTestId?: string;
+  isSaveDisabled?: boolean;
 } & (({ isEditable: true } & EditableProps) | ({ isEditable?: false } & Partial<EditableProps>));
 
 const DashboardDescriptionListGroup: React.FC<DashboardDescriptionListGroupProps> = (props) => {
@@ -57,6 +59,7 @@ const DashboardDescriptionListGroup: React.FC<DashboardDescriptionListGroupProps
     editButtonTestId,
     saveButtonTestId,
     cancelButtonTestId,
+    isSaveDisabled,
   } = props;
   return (
     <DescriptionListGroup data-testid={groupTestId}>
@@ -74,7 +77,7 @@ const DashboardDescriptionListGroup: React.FC<DashboardDescriptionListGroupProps
                         aria-label={`Save edits to ${title}`}
                         variant="link"
                         onClick={onSaveEditsClick}
-                        isDisabled={isSavingEdits}
+                        isDisabled={isSavingEdits || isSaveDisabled}
                       >
                         <CheckIcon />
                       </Button>
diff --git a/frontend/src/components/EditableLabelsDescriptionListGroup.tsx b/frontend/src/components/EditableLabelsDescriptionListGroup.tsx
index 309a4dca9b..027e19a6b0 100644
--- a/frontend/src/components/EditableLabelsDescriptionListGroup.tsx
+++ b/frontend/src/components/EditableLabelsDescriptionListGroup.tsx
@@ -1,223 +1,191 @@
-import * as React from 'react';
-import {
-  Button,
-  Form,
-  FormGroup,
-  FormHelperText,
-  HelperText,
-  HelperTextItem,
-  Label,
-  LabelGroup,
-  Modal,
-  TextInput,
-} from '@patternfly/react-core';
-import { ExclamationCircleIcon } from '@patternfly/react-icons';
-import DashboardDescriptionListGroup, {
-  DashboardDescriptionListGroupProps,
-} from './DashboardDescriptionListGroup';
+import React, { useState } from 'react';
+import { Label, LabelGroup, Alert, AlertVariant, Button } from '@patternfly/react-core';
+import DashboardDescriptionListGroup from './DashboardDescriptionListGroup';
 
-type EditableTextDescriptionListGroupProps = Partial<
-  Pick<DashboardDescriptionListGroupProps, 'title' | 'contentWhenEmpty'>
-> & {
+interface EditableLabelsProps {
   labels: string[];
-  saveEditedLabels: (labels: string[]) => Promise<unknown>;
-  allExistingKeys?: string[];
+  onLabelsChange: (labels: string[]) => Promise<void>;
   isArchive?: boolean;
-};
+  title?: string;
+  contentWhenEmpty?: string;
+  allExistingKeys: string[];
+}
 
-const EditableLabelsDescriptionListGroup: React.FC<EditableTextDescriptionListGroupProps> = ({
+export const EditableLabelsDescriptionListGroup: React.FC<EditableLabelsProps> = ({
   title = 'Labels',
   contentWhenEmpty = 'No labels',
   labels,
-  saveEditedLabels,
+  onLabelsChange,
   isArchive,
-  allExistingKeys = labels,
+  allExistingKeys,
 }) => {
-  const [isEditing, setIsEditing] = React.useState(false);
-  const [unsavedLabels, setUnsavedLabels] = React.useState(labels);
-  const [isSavingEdits, setIsSavingEdits] = React.useState(false);
+  const [isEditing, setIsEditing] = useState(false);
+  const [isSavingEdits, setIsSavingEdits] = useState(false);
+  const [unsavedLabels, setUnsavedLabels] = useState(labels);
+  const [labelErrors, setLabelErrors] = useState<{ [key: string]: string }>({});
 
-  const editUnsavedLabel = (newText: string, index: number) => {
-    if (isSavingEdits) {
-      return;
+  const validateLabel = (text: string, currentLabel?: string): string | null => {
+    if (currentLabel === text) {
+      return null;
+    }
+
+    const isDuplicate =
+      unsavedLabels.some((key) => key !== currentLabel && key === text) ||
+      allExistingKeys.some((key) => key !== currentLabel && key === text);
+
+    if (isDuplicate) {
+      return `"${text}" already exists. Use a unique name that doesn't match any existing key or property`;
+    }
+    if (text.length > 63) {
+      return "Label text can't exceed 63 characters";
     }
-    const copy = [...unsavedLabels];
-    copy[index] = newText;
-    setUnsavedLabels(copy);
+    return null;
   };
+
+  const handleEditComplete = (
+    _event: MouseEvent | KeyboardEvent,
+    newText: string,
+    currentLabel?: string,
+  ) => {
+    const error = validateLabel(newText, currentLabel);
+    if (error) {
+      setLabelErrors({ [newText]: error });
+      setUnsavedLabels((prev) => {
+        const filtered = prev.filter((label) => label !== currentLabel);
+        return [...filtered, newText];
+      });
+    } else if (newText) {
+      setUnsavedLabels((prev) => {
+        if (currentLabel) {
+          return [...prev, newText];
+        }
+        const filtered = prev.filter((label) => label !== currentLabel);
+        return [...filtered, newText];
+      });
+      setLabelErrors({});
+    }
+  };
+
   const removeUnsavedLabel = (text: string) => {
     if (isSavingEdits) {
       return;
     }
     setUnsavedLabels(unsavedLabels.filter((label) => label !== text));
   };
-  const addUnsavedLabel = (text: string) => {
+
+  const addNewLabel = () => {
     if (isSavingEdits) {
       return;
     }
-    setUnsavedLabels([...unsavedLabels, text]);
-  };
-
-  // Don't allow a label that matches a non-label property key or another label (as they stand before saving)
-  // Note that this means if you remove a label and add it back before saving, that is valid
-  const reservedKeys = [
-    ...allExistingKeys.filter((key) => !labels.includes(key)),
-    ...unsavedLabels,
-  ];
+    const baseLabel = 'New Label';
+    let counter = 1;
+    let newLabel = baseLabel;
 
-  const [isAddLabelModalOpen, setIsAddLabelModalOpen] = React.useState(false);
-  const [addLabelInputValue, setAddLabelInputValue] = React.useState('');
-  const addLabelInputRef = React.useRef<HTMLInputElement>(null);
-  let addLabelValidationError: string | null = null;
-  if (reservedKeys.includes(addLabelInputValue)) {
-    addLabelValidationError = 'Label must not match an existing label or property key';
-  } else if (addLabelInputValue.length > 63) {
-    addLabelValidationError = "Label text can't exceed 63 characters";
-  }
-
-  const toggleAddLabelModal = () => {
-    setAddLabelInputValue('');
-    setIsAddLabelModalOpen(!isAddLabelModalOpen);
-  };
-  React.useEffect(() => {
-    if (isAddLabelModalOpen && addLabelInputRef.current) {
-      addLabelInputRef.current.focus();
+    while (unsavedLabels.includes(newLabel)) {
+      newLabel = `${baseLabel} ${counter}`;
+      counter++;
     }
-  }, [isAddLabelModalOpen]);
 
-  const addLabelModalSubmitDisabled = !addLabelInputValue || !!addLabelValidationError;
-  const submitAddLabelModal = (event?: React.FormEvent) => {
-    event?.preventDefault();
-    if (!addLabelModalSubmitDisabled) {
-      addUnsavedLabel(addLabelInputValue);
-      toggleAddLabelModal();
-    }
+    setUnsavedLabels((prev) => [...prev, newLabel]);
   };
 
   return (
-    <>
-      <DashboardDescriptionListGroup
-        title={title}
-        isEmpty={labels.length === 0}
-        contentWhenEmpty={contentWhenEmpty}
-        isEditable={!isArchive}
-        isEditing={isEditing}
-        isSavingEdits={isSavingEdits}
-        contentWhenEditing={
+    <DashboardDescriptionListGroup
+      editButtonTestId="editable-labels-group-edit"
+      saveButtonTestId="editable-labels-group-save"
+      title={title}
+      isEmpty={labels.length === 0}
+      contentWhenEmpty={contentWhenEmpty}
+      isEditable={!isArchive}
+      isEditing={isEditing}
+      isSavingEdits={isSavingEdits}
+      isSaveDisabled={Object.keys(labelErrors).length > 0}
+      contentWhenEditing={
+        <>
           <LabelGroup
-            data-testid="label-group"
+            data-testid="editable-label-group"
             isEditable={!isSavingEdits}
-            numLabels={unsavedLabels.length}
-            addLabelControl={
-              !isSavingEdits && (
-                <Label
-                  textMaxWidth="40ch"
-                  color="blue"
-                  variant="outline"
-                  isOverflowLabel
-                  onClick={toggleAddLabelModal}
-                >
-                  Add label
-                </Label>
-              )
-            }
+            numLabels={10}
+            expandedText="Show Less"
+            collapsedText="Show More"
           >
-            {unsavedLabels.map((label, index) => (
+            {unsavedLabels.map((label, index, array) => (
               <Label
-                key={label}
-                color="blue"
-                data-testid="label"
+                data-testid={`editable-label-${label}`}
+                key={label + index}
+                color={labelErrors[label] && index === array.lastIndexOf(label) ? 'red' : 'blue'}
                 isEditable={!isSavingEdits}
-                editableProps={{ 'aria-label': `Editable label with text ${label}` }}
                 onClose={() => removeUnsavedLabel(label)}
-                closeBtnProps={{ isDisabled: isSavingEdits }}
-                onEditComplete={(_event, newText) => {
-                  if (!reservedKeys.includes(newText) && newText.length <= 63) {
-                    editUnsavedLabel(newText, index);
-                  }
+                closeBtnProps={{
+                  isDisabled: isSavingEdits,
+                  'data-testid': `remove-label-${label}`,
+                }}
+                onEditComplete={(event, newText) => handleEditComplete(event, newText, label)}
+                editableProps={{
+                  defaultValue: label,
+                  'aria-label': 'Edit label',
+                  'data-testid': `edit-label-input-${label}`,
                 }}
               >
                 {label}
               </Label>
             ))}
+            <Button
+              data-testid="add-label-button"
+              variant="plain"
+              className="pf-v5-c-label pf-m-outline"
+              onClick={addNewLabel}
+              isDisabled={isSavingEdits}
+              style={{
+                border: '2px solid #d2d2d2',
+                color: '#0066CC',
+                backgroundColor: 'transparent',
+              }}
+            >
+              Add label
+            </Button>
           </LabelGroup>
+          {Object.keys(labelErrors).length > 0 && (
+            <Alert
+              data-testid="label-error-alert"
+              variant={AlertVariant.danger}
+              isInline
+              title={Object.values(labelErrors)[0]}
+              aria-live="polite"
+              isPlain
+            />
+          )}
+        </>
+      }
+      onEditClick={() => {
+        setUnsavedLabels(labels);
+        setLabelErrors({});
+        setIsEditing(true);
+      }}
+      onSaveEditsClick={async () => {
+        if (Object.keys(labelErrors).length > 0) {
+          return;
         }
-        onEditClick={() => {
-          setUnsavedLabels(labels);
-          setIsEditing(true);
-        }}
-        onSaveEditsClick={async () => {
-          setIsSavingEdits(true);
-          try {
-            await saveEditedLabels(unsavedLabels);
-          } finally {
-            setIsSavingEdits(false);
-          }
-          setIsEditing(false);
-        }}
-        onDiscardEditsClick={() => {
-          setUnsavedLabels(labels);
+        setIsSavingEdits(true);
+        try {
+          await onLabelsChange(unsavedLabels);
+        } finally {
+          setIsSavingEdits(false);
           setIsEditing(false);
-        }}
-      >
-        <LabelGroup data-testid="label-group">
-          {labels.map((label) => (
-            <Label key={label} color="blue" data-testid="label">
-              {label}
-            </Label>
-          ))}
-        </LabelGroup>
-      </DashboardDescriptionListGroup>
-      {isAddLabelModalOpen ? (
-        <Modal
-          variant="small"
-          title="Add label"
-          isOpen
-          onClose={toggleAddLabelModal}
-          actions={[
-            <Button
-              key="save"
-              variant="primary"
-              form="add-label-form"
-              onClick={submitAddLabelModal}
-              isDisabled={addLabelModalSubmitDisabled}
-            >
-              Save
-            </Button>,
-            <Button key="cancel" variant="link" onClick={toggleAddLabelModal}>
-              Cancel
-            </Button>,
-          ]}
-        >
-          <Form id="add-label-form" onSubmit={submitAddLabelModal}>
-            <FormGroup label="Label text" fieldId="add-label-form-label-text" isRequired>
-              <TextInput
-                type="text"
-                id="add-label-form-label-text"
-                name="add-label-form-label-text"
-                value={addLabelInputValue}
-                onChange={(_event: React.FormEvent<HTMLInputElement>, value: string) =>
-                  setAddLabelInputValue(value)
-                }
-                ref={addLabelInputRef}
-                isRequired
-                validated={addLabelValidationError ? 'error' : 'default'}
-              />
-              {addLabelValidationError && (
-                <FormHelperText>
-                  <HelperText>
-                    <HelperTextItem icon={<ExclamationCircleIcon />} variant="error">
-                      {addLabelValidationError}
-                    </HelperTextItem>
-                  </HelperText>
-                </FormHelperText>
-              )}
-            </FormGroup>
-          </Form>
-        </Modal>
-      ) : null}
-    </>
+        }
+      }}
+      onDiscardEditsClick={() => {
+        setUnsavedLabels(labels);
+        setIsEditing(false);
+      }}
+    >
+      <LabelGroup data-testid="display-label-group">
+        {labels.map((label) => (
+          <Label key={label} color="blue" data-testid="label">
+            {label}
+          </Label>
+        ))}
+      </LabelGroup>
+    </DashboardDescriptionListGroup>
   );
 };
-
-export default EditableLabelsDescriptionListGroup;
diff --git a/frontend/src/pages/modelRegistry/screens/ModelVersionDetails/ModelVersionDetailsView.tsx b/frontend/src/pages/modelRegistry/screens/ModelVersionDetails/ModelVersionDetailsView.tsx
index 7bf00b05e0..d9e00408fa 100644
--- a/frontend/src/pages/modelRegistry/screens/ModelVersionDetails/ModelVersionDetailsView.tsx
+++ b/frontend/src/pages/modelRegistry/screens/ModelVersionDetails/ModelVersionDetailsView.tsx
@@ -3,7 +3,7 @@ import { DescriptionList, Flex, FlexItem, TextVariants, Title } from '@patternfl
 import { ModelVersion } from '~/concepts/modelRegistry/types';
 import DashboardDescriptionListGroup from '~/components/DashboardDescriptionListGroup';
 import EditableTextDescriptionListGroup from '~/components/EditableTextDescriptionListGroup';
-import EditableLabelsDescriptionListGroup from '~/components/EditableLabelsDescriptionListGroup';
+import { EditableLabelsDescriptionListGroup } from '~/components/EditableLabelsDescriptionListGroup';
 import ModelPropertiesDescriptionListGroup from '~/pages/modelRegistry/screens/ModelPropertiesDescriptionListGroup';
 import { getLabels, mergeUpdatedLabels } from '~/pages/modelRegistry/screens/utils';
 import useModelArtifactsByVersionId from '~/concepts/modelRegistry/apiHooks/useModelArtifactsByVersionId';
@@ -61,7 +61,9 @@ const ModelVersionDetailsView: React.FC<ModelVersionDetailsViewProps> = ({
             labels={getLabels(mv.customProperties)}
             isArchive={isArchiveVersion}
             allExistingKeys={Object.keys(mv.customProperties)}
-            saveEditedLabels={(editedLabels) =>
+            title="Labels"
+            contentWhenEmpty="No labels"
+            onLabelsChange={(editedLabels) =>
               apiState.api
                 .patchModelVersion(
                   {},
@@ -72,6 +74,7 @@ const ModelVersionDetailsView: React.FC<ModelVersionDetailsViewProps> = ({
                 )
                 .then(refresh)
             }
+            data-testid="model-version-labels"
           />
           <ModelPropertiesDescriptionListGroup
             isArchive={isArchiveVersion}
diff --git a/frontend/src/pages/modelRegistry/screens/ModelVersions/ModelDetailsView.tsx b/frontend/src/pages/modelRegistry/screens/ModelVersions/ModelDetailsView.tsx
index f38366f0a1..c4a7006fb3 100644
--- a/frontend/src/pages/modelRegistry/screens/ModelVersions/ModelDetailsView.tsx
+++ b/frontend/src/pages/modelRegistry/screens/ModelVersions/ModelDetailsView.tsx
@@ -4,7 +4,7 @@ import { RegisteredModel } from '~/concepts/modelRegistry/types';
 import { ModelRegistryContext } from '~/concepts/modelRegistry/context/ModelRegistryContext';
 import DashboardDescriptionListGroup from '~/components/DashboardDescriptionListGroup';
 import EditableTextDescriptionListGroup from '~/components/EditableTextDescriptionListGroup';
-import EditableLabelsDescriptionListGroup from '~/components/EditableLabelsDescriptionListGroup';
+import { EditableLabelsDescriptionListGroup } from '~/components/EditableLabelsDescriptionListGroup';
 import ModelTimestamp from '~/pages/modelRegistry/screens/components/ModelTimestamp';
 import { getLabels, mergeUpdatedLabels } from '~/pages/modelRegistry/screens/utils';
 import ModelPropertiesDescriptionListGroup from '~/pages/modelRegistry/screens/ModelPropertiesDescriptionListGroup';
@@ -51,7 +51,9 @@ const ModelDetailsView: React.FC<ModelDetailsViewProps> = ({
             labels={getLabels(rm.customProperties)}
             isArchive={isArchiveModel}
             allExistingKeys={Object.keys(rm.customProperties)}
-            saveEditedLabels={(editedLabels) =>
+            title="Labels"
+            contentWhenEmpty="No labels"
+            onLabelsChange={(editedLabels) =>
               apiState.api
                 .patchRegisteredModel(
                   {},