diff --git a/README.md b/README.md
index 0dceb8c..4a56839 100644
--- a/README.md
+++ b/README.md
@@ -49,7 +49,7 @@ on:
   pull_request_review_comment:
     types: [created]
   issues:
-    types: [opened, assigned]
+    types: [opened, assigned, labeled]
   pull_request_review:
     types: [submitted]
 
@@ -65,6 +65,8 @@ jobs:
           # trigger_phrase: "/claude"
           # Optional: add assignee trigger for issues
           # assignee_trigger: "claude"
+          # Optional: add label trigger for issues
+          # label_trigger: "claude"
           # Optional: add custom environment variables (YAML format)
           # claude_env: |
           #   NODE_ENV: test
@@ -92,6 +94,7 @@ jobs:
 | `custom_instructions` | Additional custom instructions to include in the prompt for Claude                                                   | No       | ""        |
 | `mcp_config`          | Additional MCP configuration (JSON string) that merges with the built-in GitHub MCP servers                          | No       | ""        |
 | `assignee_trigger`    | The assignee username that triggers the action (e.g. @claude). Only used for issue assignment                        | No       | -         |
+| `label_trigger`       | The label name that triggers the action when applied to an issue (e.g. "claude")                                     | No       | -         |
 | `trigger_phrase`      | The trigger phrase to look for in comments, issue/PR bodies, and issue titles                                        | No       | `@claude` |
 | `claude_env`          | Custom environment variables to pass to Claude Code execution (YAML format)                                          | No       | ""        |
 
diff --git a/action.yml b/action.yml
index 697ea8b..8f489f7 100644
--- a/action.yml
+++ b/action.yml
@@ -12,6 +12,10 @@ inputs:
   assignee_trigger:
     description: "The assignee username that triggers the action (e.g. @claude)"
     required: false
+  label_trigger:
+    description: "The label that triggers the action (e.g. claude)"
+    required: false
+    default: "claude"
   base_branch:
     description: "The branch to use as the base/source when creating new branches (defaults to repository default branch)"
     required: false
diff --git a/src/create-prompt/index.ts b/src/create-prompt/index.ts
index d498cf9..876c5d6 100644
--- a/src/create-prompt/index.ts
+++ b/src/create-prompt/index.ts
@@ -81,6 +81,7 @@ export function prepareContext(
   const eventAction = context.eventAction;
   const triggerPhrase = context.inputs.triggerPhrase || "@claude";
   const assigneeTrigger = context.inputs.assigneeTrigger;
+  const labelTrigger = context.inputs.labelTrigger;
   const customInstructions = context.inputs.customInstructions;
   const allowedTools = context.inputs.allowedTools;
   const disallowedTools = context.inputs.disallowedTools;
@@ -256,6 +257,19 @@ export function prepareContext(
           claudeBranch,
           assigneeTrigger,
         };
+      } else if (eventAction === "labeled") {
+        if (!labelTrigger) {
+          throw new Error("LABEL_TRIGGER is required for issue labeled event");
+        }
+        eventData = {
+          eventName: "issues",
+          eventAction: "labeled",
+          isPR: false,
+          issueNumber,
+          baseBranch,
+          claudeBranch,
+          labelTrigger,
+        };
       } else if (eventAction === "opened") {
         eventData = {
           eventName: "issues",
@@ -328,6 +342,11 @@ export function getEventTypeAndContext(envVars: PreparedContext): {
           eventType: "ISSUE_CREATED",
           triggerContext: `new issue with '${envVars.triggerPhrase}' in body`,
         };
+      } else if (eventData.eventAction === "labeled") {
+        return {
+          eventType: "ISSUE_LABELED",
+          triggerContext: `issue labeled with '${eventData.labelTrigger}'`,
+        };
       }
       return {
         eventType: "ISSUE_ASSIGNED",
@@ -465,6 +484,7 @@ Follow these steps:
    - Analyze the pre-fetched data provided above.
    - For ISSUE_CREATED: Read the issue body to find the request after the trigger phrase.
    - For ISSUE_ASSIGNED: Read the entire issue body to understand the task.
+   - For ISSUE_LABELED: Read the entire issue body to understand the task.
 ${eventData.eventName === "issue_comment" || eventData.eventName === "pull_request_review_comment" || eventData.eventName === "pull_request_review" ? `   - For comment/review events: Your instructions are in the <trigger_comment> tag above.` : ""}
 ${context.directPrompt ? `   - DIRECT INSTRUCTION: A direct instruction was provided and is shown in the <direct_prompt> tag above. This is not from any GitHub comment but a direct instruction to execute.` : ""}
    - IMPORTANT: Only the comment/issue containing '${context.triggerPhrase}' has your instructions.
diff --git a/src/create-prompt/types.ts b/src/create-prompt/types.ts
index 00bba5e..618b33d 100644
--- a/src/create-prompt/types.ts
+++ b/src/create-prompt/types.ts
@@ -68,6 +68,16 @@ type IssueAssignedEvent = {
   assigneeTrigger: string;
 };
 
+type IssueLabeledEvent = {
+  eventName: "issues";
+  eventAction: "labeled";
+  isPR: false;
+  issueNumber: string;
+  baseBranch: string;
+  claudeBranch: string;
+  labelTrigger: string;
+};
+
 type PullRequestEvent = {
   eventName: "pull_request";
   eventAction?: string; // opened, synchronize, etc.
@@ -85,6 +95,7 @@ export type EventData =
   | IssueCommentEvent
   | IssueOpenedEvent
   | IssueAssignedEvent
+  | IssueLabeledEvent
   | PullRequestEvent;
 
 // Combined type with separate eventData field
diff --git a/src/github/context.ts b/src/github/context.ts
index d8b1581..214f2ca 100644
--- a/src/github/context.ts
+++ b/src/github/context.ts
@@ -28,6 +28,7 @@ export type ParsedGitHubContext = {
   inputs: {
     triggerPhrase: string;
     assigneeTrigger: string;
+    labelTrigger: string;
     allowedTools: string[];
     disallowedTools: string[];
     customInstructions: string;
@@ -52,6 +53,7 @@ export function parseGitHubContext(): ParsedGitHubContext {
     inputs: {
       triggerPhrase: process.env.TRIGGER_PHRASE ?? "@claude",
       assigneeTrigger: process.env.ASSIGNEE_TRIGGER ?? "",
+      labelTrigger: process.env.LABEL_TRIGGER ?? "",
       allowedTools: parseMultilineInput(process.env.ALLOWED_TOOLS ?? ""),
       disallowedTools: parseMultilineInput(process.env.DISALLOWED_TOOLS ?? ""),
       customInstructions: process.env.CUSTOM_INSTRUCTIONS ?? "",
diff --git a/src/github/validation/trigger.ts b/src/github/validation/trigger.ts
index 6a06153..333f617 100644
--- a/src/github/validation/trigger.ts
+++ b/src/github/validation/trigger.ts
@@ -12,7 +12,7 @@ import type { ParsedGitHubContext } from "../context";
 
 export function checkContainsTrigger(context: ParsedGitHubContext): boolean {
   const {
-    inputs: { assigneeTrigger, triggerPhrase, directPrompt },
+    inputs: { assigneeTrigger, labelTrigger, triggerPhrase, directPrompt },
   } = context;
 
   // If direct prompt is provided, always trigger
@@ -33,6 +33,16 @@ export function checkContainsTrigger(context: ParsedGitHubContext): boolean {
     }
   }
 
+  // Check for label trigger
+  if (isIssuesEvent(context) && context.eventAction === "labeled") {
+    const labelName = (context.payload as any).label?.name || "";
+
+    if (labelTrigger && labelName === labelTrigger) {
+      console.log(`Issue labeled with trigger label '${labelTrigger}'`);
+      return true;
+    }
+  }
+
   // Check for issue body and title trigger on issue creation
   if (isIssuesEvent(context) && context.eventAction === "opened") {
     const issueBody = context.payload.issue.body || "";
diff --git a/test/create-prompt.test.ts b/test/create-prompt.test.ts
index 472ff65..7ae1ff7 100644
--- a/test/create-prompt.test.ts
+++ b/test/create-prompt.test.ts
@@ -226,6 +226,33 @@ describe("generatePrompt", () => {
     );
   });
 
+  test("should generate prompt for issue labeled event", () => {
+    const envVars: PreparedContext = {
+      repository: "owner/repo",
+      claudeCommentId: "12345",
+      triggerPhrase: "@claude",
+      eventData: {
+        eventName: "issues",
+        eventAction: "labeled",
+        isPR: false,
+        issueNumber: "888",
+        baseBranch: "main",
+        claudeBranch: "claude/issue-888-20240101_120000",
+        labelTrigger: "claude-task",
+      },
+    };
+
+    const prompt = generatePrompt(envVars, mockGitHubData);
+
+    expect(prompt).toContain("<event_type>ISSUE_LABELED</event_type>");
+    expect(prompt).toContain(
+      "<trigger_context>issue labeled with 'claude-task'</trigger_context>",
+    );
+    expect(prompt).toContain(
+      "[Create a PR](https://github.com/owner/repo/compare/main",
+    );
+  });
+
   test("should include direct prompt when provided", () => {
     const envVars: PreparedContext = {
       repository: "owner/repo",
@@ -614,6 +641,28 @@ describe("getEventTypeAndContext", () => {
     expect(result.eventType).toBe("ISSUE_ASSIGNED");
     expect(result.triggerContext).toBe("issue assigned to 'claude-bot'");
   });
+
+  test("should return correct type and context for issue labeled", () => {
+    const envVars: PreparedContext = {
+      repository: "owner/repo",
+      claudeCommentId: "12345",
+      triggerPhrase: "@claude",
+      eventData: {
+        eventName: "issues",
+        eventAction: "labeled",
+        isPR: false,
+        issueNumber: "888",
+        baseBranch: "main",
+        claudeBranch: "claude/issue-888-20240101_120000",
+        labelTrigger: "claude-task",
+      },
+    };
+
+    const result = getEventTypeAndContext(envVars);
+
+    expect(result.eventType).toBe("ISSUE_LABELED");
+    expect(result.triggerContext).toBe("issue labeled with 'claude-task'");
+  });
 });
 
 describe("buildAllowedToolsString", () => {
diff --git a/test/mockContext.ts b/test/mockContext.ts
index 692137c..a843ee9 100644
--- a/test/mockContext.ts
+++ b/test/mockContext.ts
@@ -10,6 +10,7 @@ import type {
 const defaultInputs = {
   triggerPhrase: "/claude",
   assigneeTrigger: "",
+  labelTrigger: "",
   anthropicModel: "claude-3-7-sonnet-20250219",
   allowedTools: [] as string[],
   disallowedTools: [] as string[],
@@ -122,6 +123,46 @@ export const mockIssueAssignedContext: ParsedGitHubContext = {
   inputs: { ...defaultInputs, assigneeTrigger: "@claude-bot" },
 };
 
+export const mockIssueLabeledContext: ParsedGitHubContext = {
+  runId: "1234567890",
+  eventName: "issues",
+  eventAction: "labeled",
+  repository: defaultRepository,
+  actor: "admin-user",
+  payload: {
+    action: "labeled",
+    issue: {
+      number: 1234,
+      title: "Enhancement: Improve search functionality",
+      body: "The current search is too slow and needs optimization",
+      user: {
+        login: "alice-wonder",
+        id: 54321,
+        avatar_url: "https://avatars.githubusercontent.com/u/54321",
+        html_url: "https://github.com/alice-wonder",
+      },
+      assignee: null,
+    },
+    label: {
+      id: 987654321,
+      name: "claude-task",
+      color: "f29513",
+      description: "Label for Claude AI interactions",
+    },
+    repository: {
+      name: "test-repo",
+      full_name: "test-owner/test-repo",
+      private: false,
+      owner: {
+        login: "test-owner",
+      },
+    },
+  } as IssuesEvent,
+  entityNumber: 1234,
+  isPR: false,
+  inputs: { ...defaultInputs, labelTrigger: "claude-task" },
+};
+
 // Issue comment on issue event
 export const mockIssueCommentContext: ParsedGitHubContext = {
   runId: "1234567890",
diff --git a/test/permissions.test.ts b/test/permissions.test.ts
index 61e2ca9..a44cfb1 100644
--- a/test/permissions.test.ts
+++ b/test/permissions.test.ts
@@ -62,6 +62,7 @@ describe("checkWritePermissions", () => {
     inputs: {
       triggerPhrase: "@claude",
       assigneeTrigger: "",
+      labelTrigger: "",
       allowedTools: [],
       disallowedTools: [],
       customInstructions: "",
diff --git a/test/trigger-validation.test.ts b/test/trigger-validation.test.ts
index bbe40bd..8d8f23c 100644
--- a/test/trigger-validation.test.ts
+++ b/test/trigger-validation.test.ts
@@ -6,6 +6,7 @@ import { describe, it, expect } from "bun:test";
 import {
   createMockContext,
   mockIssueAssignedContext,
+  mockIssueLabeledContext,
   mockIssueCommentContext,
   mockIssueOpenedContext,
   mockPullRequestReviewContext,
@@ -29,6 +30,7 @@ describe("checkContainsTrigger", () => {
         inputs: {
           triggerPhrase: "/claude",
           assigneeTrigger: "",
+          labelTrigger: "",
           directPrompt: "Fix the bug in the login form",
           allowedTools: [],
           disallowedTools: [],
@@ -55,6 +57,7 @@ describe("checkContainsTrigger", () => {
         inputs: {
           triggerPhrase: "/claude",
           assigneeTrigger: "",
+          labelTrigger: "",
           directPrompt: "",
           allowedTools: [],
           disallowedTools: [],
@@ -102,6 +105,39 @@ describe("checkContainsTrigger", () => {
     });
   });
 
+  describe("label trigger", () => {
+    it("should return true when issue is labeled with the trigger label", () => {
+      const context = mockIssueLabeledContext;
+      expect(checkContainsTrigger(context)).toBe(true);
+    });
+
+    it("should return false when issue is labeled with a different label", () => {
+      const context = {
+        ...mockIssueLabeledContext,
+        payload: {
+          ...mockIssueLabeledContext.payload,
+          label: {
+            ...(mockIssueLabeledContext.payload as any).label,
+            name: "bug",
+          },
+        },
+      } as ParsedGitHubContext;
+      expect(checkContainsTrigger(context)).toBe(false);
+    });
+
+    it("should return false for non-labeled events", () => {
+      const context = {
+        ...mockIssueLabeledContext,
+        eventAction: "opened",
+        payload: {
+          ...mockIssueLabeledContext.payload,
+          action: "opened",
+        },
+      } as ParsedGitHubContext;
+      expect(checkContainsTrigger(context)).toBe(false);
+    });
+  });
+
   describe("issue body and title trigger", () => {
     it("should return true when issue body contains trigger phrase", () => {
       const context = mockIssueOpenedContext;
@@ -227,6 +263,7 @@ describe("checkContainsTrigger", () => {
         inputs: {
           triggerPhrase: "@claude",
           assigneeTrigger: "",
+          labelTrigger: "",
           directPrompt: "",
           allowedTools: [],
           disallowedTools: [],
@@ -254,6 +291,7 @@ describe("checkContainsTrigger", () => {
         inputs: {
           triggerPhrase: "@claude",
           assigneeTrigger: "",
+          labelTrigger: "",
           directPrompt: "",
           allowedTools: [],
           disallowedTools: [],
@@ -281,6 +319,7 @@ describe("checkContainsTrigger", () => {
         inputs: {
           triggerPhrase: "@claude",
           assigneeTrigger: "",
+          labelTrigger: "",
           directPrompt: "",
           allowedTools: [],
           disallowedTools: [],