diff --git a/crates/wallet/Cargo.toml b/crates/wallet/Cargo.toml
index 44314a968..b0a612a22 100644
--- a/crates/wallet/Cargo.toml
+++ b/crates/wallet/Cargo.toml
@@ -32,6 +32,7 @@ all-keys = ["keys-bip39"]
 keys-bip39 = ["bip39"]
 rusqlite = ["bdk_chain/rusqlite"]
 file_store = ["bdk_file_store"]
+labels = []
 
 [dev-dependencies]
 lazy_static = "1.4"
diff --git a/crates/wallet/src/types.rs b/crates/wallet/src/types.rs
index 6ed17b575..d7bf9e25b 100644
--- a/crates/wallet/src/types.rs
+++ b/crates/wallet/src/types.rs
@@ -10,6 +10,8 @@
 // licenses.
 
 use alloc::boxed::Box;
+#[cfg(feature = "labels")]
+use alloc::string::String;
 use core::convert::AsRef;
 
 use bdk_chain::ConfirmationTime;
@@ -63,6 +65,46 @@ pub struct LocalOutput {
     pub derivation_index: u32,
     /// The confirmation time for transaction containing this utxo
     pub confirmation_time: ConfirmationTime,
+    #[cfg(feature = "labels")]
+    /// The label for this UTXO according to
+    /// [BIP 329](https://github.com/bitcoin/bips/blob/master/bip-0329.mediawiki)
+    /// format
+    pub label: Option<Label>,
+}
+
+#[cfg(feature = "labels")]
+/// A label for a [`LocalOutput`], used to identify the purpose of the UTXO.
+///
+/// # Note
+///
+/// The labels follow the [BIP 329](https://github.com/bitcoin/bips/blob/master/bip-0329.mediawiki)
+/// export/import format.
+#[derive(Serialize, Deserialize, Debug, Clone, PartialEq, Eq, Hash)]
+#[non_exhaustive] // We might add more types in the future
+pub enum Label {
+    /// Input Outpoint: Transaction id and input index separated by a colon
+    Input(String),
+    /// Output Outpoint: Transaction id and input index separated by a colon
+    Output(String),
+}
+
+#[cfg(feature = "labels")]
+impl Label {
+    /// Gets the [`Label`]
+    pub fn label(&self) -> &str {
+        match self {
+            Label::Input(s) => s,
+            Label::Output(s) => s,
+        }
+    }
+
+    /// Edits the [`Label`]
+    pub fn edit(&mut self, new_label: String) {
+        match self {
+            Label::Input(s) => *s = new_label,
+            Label::Output(s) => *s = new_label,
+        }
+    }
 }
 
 /// A [`Utxo`] with its `satisfaction_weight`.
diff --git a/crates/wallet/src/wallet/mod.rs b/crates/wallet/src/wallet/mod.rs
index df22c8a64..528bce2e1 100644
--- a/crates/wallet/src/wallet/mod.rs
+++ b/crates/wallet/src/wallet/mod.rs
@@ -46,6 +46,8 @@ use chain::Staged;
 use core::fmt;
 use core::mem;
 use core::ops::Deref;
+#[cfg(feature = "labels")]
+use core::str::FromStr;
 use rand_core::RngCore;
 
 use descriptor::error::Error as DescriptorError;
@@ -297,6 +299,32 @@ impl fmt::Display for ApplyBlockError {
 #[cfg(feature = "std")]
 impl std::error::Error for ApplyBlockError {}
 
+#[cfg(feature = "labels")]
+/// The error type when importing [`Label`]s into a [`Wallet`].
+#[derive(Debug, PartialEq)]
+pub enum LabelError {
+    /// There was a problem with the [`Label::Input`] type.
+    Input(String),
+    /// There was a problem with the [`Label::Output`] type.
+    Output(String),
+    /// There was a problem with the [`Label::Address`] type.
+    Address(String),
+}
+
+#[cfg(feature = "labels")]
+impl fmt::Display for LabelError {
+    fn fmt(&self, f: &mut fmt::Formatter<'_>) -> fmt::Result {
+        match self {
+            LabelError::Input(l) => write!(f, "input label error: {l}"),
+            LabelError::Output(l) => write!(f, "output label error: {l}"),
+            LabelError::Address(l) => write!(f, "address label error: {l}"),
+        }
+    }
+}
+
+#[cfg(all(feature = "std", feature = "labels"))]
+impl std::error::Error for LabelError {}
+
 impl Wallet {
     /// Build a new [`Wallet`].
     ///
@@ -1570,6 +1598,8 @@ impl Wallet {
                                 is_spent: true,
                                 derivation_index,
                                 confirmation_time,
+                                #[cfg(feature = "labels")]
+                                label: None,
                             }),
                             satisfaction_weight,
                         }
@@ -2310,6 +2340,67 @@ impl Wallet {
             .batch_insert_relevant_unconfirmed(unconfirmed_txs);
         self.stage.merge(indexed_graph_changeset.into());
     }
+
+    #[cfg(feature = "labels")]
+    /// Exports the labels of all the wallet's UTXOs.
+    ///
+    /// # Note
+    ///
+    /// The labels follow the [BIP 329](https://github.com/bitcoin/bips/blob/master/bip-0329.mediawiki)
+    /// export/import format.
+    pub fn export_labels(&self) -> Vec<Option<Label>> {
+        let labels = self.list_output().map(|utxo| utxo.label).collect();
+        labels
+    }
+
+    #[cfg(feature = "labels")]
+    /// Imports labels into a wallet
+    ///
+    /// # Note
+    ///
+    /// The labels follow the [BIP 329](https://github.com/bitcoin/bips/blob/master/bip-0329.mediawiki)
+    /// export/import format.
+    pub fn import_labels(&self, labels: Vec<Label>) -> Result<(), LabelError> {
+        labels.iter().try_for_each(|label| {
+            match label {
+                Label::Input(l) => {
+                    // parse the string into an OutPoint and then match
+                    let parts = l.split(':').collect::<Vec<_>>();
+                    if parts.len() != 2 {
+                        return Err(LabelError::Input(l.to_string()));
+                    } else {
+                        let outpoint = OutPoint::new(
+                            // TODO: deal with the Error types in expect
+                            Txid::from_str(parts[0]).expect("valid txid"),
+                            u32::from_str(parts[1]).expect("valid vout"),
+                        );
+                        let local_output = self.get_utxo(outpoint);
+                        if let Some(mut local_output) = local_output {
+                            local_output.label = Some(label.clone());
+                        };
+                    }
+                }
+                Label::Output(l) => {
+                    // parse the string into an OutPoint and then match
+                    let parts = l.split(':').collect::<Vec<_>>();
+                    if parts.len() != 2 {
+                        return Err(LabelError::Input(l.to_string()));
+                    } else {
+                        let outpoint = OutPoint::new(
+                            // TODO: deal with the Error types in expect
+                            Txid::from_str(parts[0]).expect("valid txid"),
+                            u32::from_str(parts[1]).expect("valid vout"),
+                        );
+                        let local_output = self.get_utxo(outpoint);
+                        if let Some(mut local_output) = local_output {
+                            local_output.label = Some(label.clone());
+                        };
+                    }
+                }
+            }
+            Ok(())
+        })
+    }
 }
 
 /// Methods to construct sync/full-scan requests for spk-based chain sources.
@@ -2386,6 +2477,8 @@ fn new_local_utxo(
         confirmation_time: full_txo.chain_position.into(),
         keychain,
         derivation_index,
+                                #[cfg(feature = "labels")]
+        label: None,
     }
 }