diff --git a/.changeset/stale-badgers-search.md b/.changeset/stale-badgers-search.md
new file mode 100644
index 00000000000..f36cef414f8
--- /dev/null
+++ b/.changeset/stale-badgers-search.md
@@ -0,0 +1,5 @@
+---
+'@primer/react': minor
+---
+
+Introduces a draft for component to replace the existing Label component
diff --git a/docs/content/drafts/Label2.mdx b/docs/content/drafts/Label2.mdx
new file mode 100644
index 00000000000..5687f1e9cea
--- /dev/null
+++ b/docs/content/drafts/Label2.mdx
@@ -0,0 +1,102 @@
+---
+title: Label v2
+componentId: label2
+status: Alpha
+source: https://github.com/primer/react/tree/main/src/Label2
+storybook: '/react/storybook?path=story/labels-label--label'
+description: Use Label components to add contextual metadata to a design.
+---
+
+## Examples
+
+### Basic
+
+```javascript live noinline
+// import {Label} from '@primer/react/drafts'
+const {Label} = drafts // ignore docs silliness; import like that ↑
+
+render(<Label>Default</Label>)
+```
+
+### Variants
+
+```javascript live noinline
+// import {Label} from '@primer/react/drafts'
+const {Label} = drafts // ignore docs silliness; import like that ↑
+render(
+  <>
+    <Label>Default</Label>
+    <Label variant="primary">Primary</Label>
+    <Label variant="secondary">Secondary</Label>
+    <Label variant="accent">Accent</Label>
+    <Label variant="success">Success</Label>
+    <Label variant="attention">Attention</Label>
+    <Label variant="severe">Severe</Label>
+    <Label variant="danger">Danger</Label>
+    <Label variant="done">Done</Label>
+    <Label variant="sponsors">Sponsors</Label>
+  </>
+)
+```
+
+### Sizes
+
+```javascript live noinline
+// import {Label} from '@primer/react/drafts'
+const {Label} = drafts // ignore docs silliness; import like that ↑
+render(
+  <>
+    <Label>Small (default)</Label>
+    <Label size="large">Large</Label>
+  </>
+)
+```
+
+## Props
+
+### Label
+
+<PropsTable>
+  <PropsTableRow
+    name="variant"
+    type={`| 'default'
+| 'primary'
+| 'secondary'
+| 'accent'
+| 'success'
+| 'attention'
+| 'severe'
+| 'danger'
+| 'done'
+| 'sponsors'`}
+    defaultValue="'default'"
+    description="The color of the label"
+  />
+  <PropsTableRow
+    name="size"
+    type="'small' | 'large'"
+    defaultValue="'small'"
+    description="How large the label is rendered"
+  />
+</PropsTable>
+
+## Status
+
+<ComponentChecklist
+  items={{
+    propsDocumented: true,
+    noUnnecessaryDeps: true,
+    adaptsToThemes: true,
+    adaptsToScreenSizes: true,
+    fullTestCoverage: true,
+    usedInProduction: false,
+    usageExamplesDocumented: true,
+    hasStorybookStories: true,
+    designReviewed: false,
+    a11yReviewed: false,
+    stableApi: false,
+    addressedApiFeedback: false,
+    hasDesignGuidelines: false,
+    hasFigmaComponent: false
+  }}
+/>
diff --git a/src/Label2.tsx b/src/Label2.tsx
new file mode 100644
index 00000000000..34ea8357750
--- /dev/null
+++ b/src/Label2.tsx
@@ -0,0 +1,98 @@
+import styled from 'styled-components'
+import {variant} from 'styled-system'
+import sx, {SxProp, BetterSystemStyleObject} from './sx'
+import {get} from './constants'
+
+export type LabelProps = {
+  /** The color of the label */
+  variant?: LabelColorOptions
+  /** How large the label is rendered */
+  size?: LabelSizeKeys
+} & SxProp
+
+export type LabelColorOptions =
+  | 'default'
+  | 'primary'
+  | 'secondary'
+  | 'accent'
+  | 'success'
+  | 'attention'
+  | 'severe'
+  | 'danger'
+  | 'done'
+  | 'sponsors'
+
+type LabelSizeKeys = 'small' | 'large'
+
+export const variants: Record<LabelColorOptions, BetterSystemStyleObject> = {
+  default: {
+    borderColor: 'border.default'
+  },
+  primary: {
+    borderColor: 'fg.default'
+  },
+  secondary: {
+    borderColor: 'border.muted',
+    color: 'fg.muted'
+  },
+  accent: {
+    borderColor: 'accent.emphasis',
+    color: 'accent.fg'
+  },
+  success: {
+    borderColor: 'success.emphasis',
+    color: 'success.fg'
+  },
+  attention: {
+    borderColor: 'attention.emphasis',
+    color: 'attention.fg'
+  },
+  severe: {
+    borderColor: 'severe.emphasis',
+    color: 'severe.fg'
+  },
+  danger: {
+    borderColor: 'danger.emphasis',
+    color: 'danger.fg'
+  },
+  done: {
+    borderColor: 'done.fg',
+    color: 'done.emphasis'
+  },
+  sponsors: {
+    borderColor: 'sponsors.fg',
+    color: 'sponsors.emphasis'
+  }
+}
+
+const sizes: Record<LabelSizeKeys, BetterSystemStyleObject> = {
+  small: {
+    height: '20px',
+    padding: '0 7px' // hard-coded to align with Primer ViewCompnents and Primer CSS
+  },
+  large: {
+    height: '24px',
+    padding: '0 10px' // hard-coded to align with Primer ViewCompnents and Primer CSS
+  }
+}
+
+export const Label = styled.span<LabelProps>`
+  align-items: center;
+  background-color: transparent;
+  border-width: 1px;
+  border-radius: 999px;
+  border-style: solid;
+  display: inline-flex;
+  font-weight: ${get('fontWeights.bold')};
+  font-size: ${get('fontSizes.0')};
+  line-height: 1;
+  white-space: nowrap;
+  ${variant({variants})};
+  ${variant({prop: 'size', variants: sizes})};
+  ${sx};
+`
+
+Label.defaultProps = {
+  size: 'small',
+  variant: 'default'
+}
diff --git a/src/__tests__/Label2.test.tsx b/src/__tests__/Label2.test.tsx
new file mode 100644
index 00000000000..a0989ab845f
--- /dev/null
+++ b/src/__tests__/Label2.test.tsx
@@ -0,0 +1,40 @@
+import React from 'react'
+import {render, cleanup} from '@testing-library/react'
+import {axe, toHaveNoViolations} from 'jest-axe'
+import 'babel-polyfill'
+import {Label, variants, LabelColorOptions} from '../Label2'
+import {renderStyles} from '../utils/testing'
+expect.extend(toHaveNoViolations)
+
+describe('Label2', () => {
+  it('renders text node child', () => {
+    const container = render(<Label>Default</Label>)
+    const label = container.baseElement
+    expect(label.textContent).toEqual('Default')
+  })
+  it('default size is rendered as "small"', () => {
+    const expectedStyles = {
+      height: '20px',
+      padding: '0 7px'
+    }
+    const defaultStyles = renderStyles(<Label />)
+
+    expect(defaultStyles).toEqual(expect.objectContaining(expectedStyles))
+  })
+  it('default variant is rendered as "default"', () => {
+    const expectedStyles = {
+      ['border-color']: '#d0d7de'
+    }
+    const defaultStyles = renderStyles(<Label />)
+
+    expect(defaultStyles).toEqual(expect.objectContaining(expectedStyles))
+  })
+  it('should have no axe violations', async () => {
+    for (const variant in variants) {
+      const {container} = render(<Label variant={variant as LabelColorOptions}>Default</Label>)
+      const results = await axe(container)
+      expect(results).toHaveNoViolations()
+      cleanup()
+    }
+  })
+})
diff --git a/src/drafts.ts b/src/drafts.ts
index c4615831069..d3c1c663261 100644
--- a/src/drafts.ts
+++ b/src/drafts.ts
@@ -10,3 +10,4 @@ export * from './ActionList2'
 export * from './Button2'
 export * from './ActionMenu2'
 export * from './DropdownMenu2'
+export * from './Label2'
diff --git a/src/stories/Label2.stories.tsx b/src/stories/Label2.stories.tsx
new file mode 100644
index 00000000000..74fa851a372
--- /dev/null
+++ b/src/stories/Label2.stories.tsx
@@ -0,0 +1,53 @@
+import React from 'react'
+import {Meta} from '@storybook/react'
+import {BaseStyles, ThemeProvider} from '..'
+import {ComponentProps} from '../utils/types'
+import {Label} from '../Label2'
+
+type Args = ComponentProps<typeof Label>
+
+export default {
+  // TODO: update story nesting
+  title: 'Labels/Label',
+  component: Label,
+  argTypes: {
+    variant: {
+      defaultValue: 'default',
+      control: {
+        options: [
+          'default',
+          'primary',
+          'secondary',
+          'accent',
+          'success',
+          'attention',
+          'severe',
+          'danger',
+          'done',
+          'sponsors'
+        ],
+        type: 'select'
+      }
+    },
+    size: {
+      defaultValue: 'large',
+      control: {
+        options: ['small', 'large'],
+        type: 'radio'
+      }
+    }
+  },
+  decorators: [
+    Story => {
+      return (
+        <ThemeProvider>
+          <BaseStyles>
+            <Story />
+          </BaseStyles>
+        </ThemeProvider>
+      )
+    }
+  ]
+} as Meta
+
+export const label = (args: Args) => <Label {...args}>Label</Label>