diff --git a/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsEvents.kt b/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsEvents.kt
index e721632ae5..af0faa9a95 100644
--- a/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsEvents.kt
+++ b/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsEvents.kt
@@ -4,4 +4,5 @@ import org.thoughtcrime.securesms.groups.ui.GroupChangeFailureReason
 
 sealed class PermissionsSettingsEvents {
   class GroupChangeError(val reason: GroupChangeFailureReason) : PermissionsSettingsEvents()
+  object ShowMemberLabelsWillBeRemovedWarning : PermissionsSettingsEvents()
 }
diff --git a/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsFragment.kt b/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsFragment.kt
index f647a5f671..4d4d93289c 100644
--- a/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsFragment.kt
+++ b/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsFragment.kt
@@ -3,6 +3,7 @@ package org.thoughtcrime.securesms.components.settings.conversation.permissions
 import android.widget.Toast
 import androidx.annotation.StringRes
 import androidx.fragment.app.viewModels
+import com.google.android.material.dialog.MaterialAlertDialogBuilder
 import org.thoughtcrime.securesms.R
 import org.thoughtcrime.securesms.components.settings.DSLConfiguration
 import org.thoughtcrime.securesms.components.settings.DSLSettingsFragment
@@ -39,6 +40,7 @@ class PermissionsSettingsFragment : DSLSettingsFragment(
     viewModel.events.observe(viewLifecycleOwner) { event ->
       when (event) {
         is PermissionsSettingsEvents.GroupChangeError -> handleGroupChangeError(event)
+        is PermissionsSettingsEvents.ShowMemberLabelsWillBeRemovedWarning -> showMemberLabelsWillBeRemovedDialog()
       }
     }
   }
@@ -94,13 +96,26 @@ class PermissionsSettingsFragment : DSLSettingsFragment(
           selected = getSelected(state.nonAdminCanSetMemberLabel),
           confirmAction = true,
           onSelected = { selectedIndex ->
-            viewModel.setNonAdminCanSetMemberLabel(selectedIndex == 1)
+            if (selectedIndex >= 0) {
+              viewModel.onMemberLabelPermissionChangeRequested(nonAdminCanSetMemberLabel = selectedIndex == 1)
+            }
           }
         )
       }
     }
   }
 
+  private fun showMemberLabelsWillBeRemovedDialog() {
+    MaterialAlertDialogBuilder(requireContext())
+      .setTitle(R.string.PermissionsSettingsFragment__member_labels_will_be_cleared_title)
+      .setMessage(R.string.PermissionsSettingsFragment__member_labels_will_be_cleared_body)
+      .setPositiveButton(R.string.PermissionsSettingsFragment__change_permission) { _, _ ->
+        viewModel.onRestrictMemberLabelsToAdminsConfirmed()
+      }
+      .setNegativeButton(android.R.string.cancel, null)
+      .show()
+  }
+
   @StringRes
   private fun getSelected(isNonAdminAllowed: Boolean): Int {
     return if (isNonAdminAllowed) {
diff --git a/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsRepository.kt b/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsRepository.kt
index cefa738fa1..6d1a04ad85 100644
--- a/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsRepository.kt
+++ b/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsRepository.kt
@@ -3,6 +3,9 @@ package org.thoughtcrime.securesms.components.settings.conversation.permissions
 import android.content.Context
 import org.signal.core.util.concurrent.SignalExecutors
 import org.signal.core.util.logging.Log
+import org.signal.core.util.orNull
+import org.thoughtcrime.securesms.database.GroupTable
+import org.thoughtcrime.securesms.database.SignalDatabase
 import org.thoughtcrime.securesms.groups.GroupAccessControl
 import org.thoughtcrime.securesms.groups.GroupChangeException
 import org.thoughtcrime.securesms.groups.GroupId
@@ -13,7 +16,10 @@ import java.io.IOException
 
 private val TAG = Log.tag(PermissionsSettingsRepository::class.java)
 
-class PermissionsSettingsRepository(private val context: Context) {
+class PermissionsSettingsRepository(
+  private val context: Context,
+  private val groupTable: GroupTable = SignalDatabase.groups
+) {
 
   fun applyMembershipRightsChange(groupId: GroupId, newRights: GroupAccessControl, error: GroupChangeErrorCallback) {
     SignalExecutors.UNBOUNDED.execute {
@@ -57,6 +63,12 @@ class PermissionsSettingsRepository(private val context: Context) {
     }
   }
 
+  fun hasNonAdminMembersWithLabels(groupId: GroupId): Boolean {
+    val v2GroupId = groupId.v2OrNull() ?: return false
+    val group = groupTable.getGroup(v2GroupId).orNull() ?: return false
+    return group.requireV2GroupProperties().nonAdminMembersWithLabels().isNotEmpty()
+  }
+
   fun applyMemberLabelRightsChange(groupId: GroupId, newRights: GroupAccessControl, errorCallback: GroupChangeErrorCallback) {
     SignalExecutors.UNBOUNDED.execute {
       try {
diff --git a/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsViewModel.kt b/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsViewModel.kt
index 03ff270dc1..1064ac4b68 100644
--- a/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsViewModel.kt
+++ b/app/src/main/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsViewModel.kt
@@ -11,11 +11,11 @@ import org.thoughtcrime.securesms.util.livedata.Store
 
 class PermissionsSettingsViewModel(
   private val groupId: GroupId,
-  private val repository: PermissionsSettingsRepository
+  private val repository: PermissionsSettingsRepository,
+  liveGroup: LiveGroup = LiveGroup(groupId)
 ) : ViewModel() {
 
   private val store = Store(PermissionsSettingsState())
-  private val liveGroup = LiveGroup(groupId)
   private val internalEvents = SingleLiveEvent<PermissionsSettingsEvents>()
 
   val state: LiveData<PermissionsSettingsState> = store.stateLiveData
@@ -61,7 +61,17 @@ class PermissionsSettingsViewModel(
     }
   }
 
-  fun setNonAdminCanSetMemberLabel(nonAdminCanSetMemberLabel: Boolean) {
+  fun onMemberLabelPermissionChangeRequested(nonAdminCanSetMemberLabel: Boolean) {
+    if (!nonAdminCanSetMemberLabel && repository.hasNonAdminMembersWithLabels(groupId)) {
+      internalEvents.postValue(PermissionsSettingsEvents.ShowMemberLabelsWillBeRemovedWarning)
+    } else {
+      setNonAdminCanSetMemberLabel(nonAdminCanSetMemberLabel)
+    }
+  }
+
+  fun onRestrictMemberLabelsToAdminsConfirmed() = setNonAdminCanSetMemberLabel(false)
+
+  private fun setNonAdminCanSetMemberLabel(nonAdminCanSetMemberLabel: Boolean) {
     repository.applyMemberLabelRightsChange(
       groupId = groupId,
       newRights = nonAdminCanSetMemberLabel.asGroupAccessControl()
diff --git a/app/src/main/java/org/thoughtcrime/securesms/database/GroupTable.kt b/app/src/main/java/org/thoughtcrime/securesms/database/GroupTable.kt
index e67cae4c5f..f582fc05b1 100644
--- a/app/src/main/java/org/thoughtcrime/securesms/database/GroupTable.kt
+++ b/app/src/main/java/org/thoughtcrime/securesms/database/GroupTable.kt
@@ -42,8 +42,10 @@ import org.signal.libsignal.zkgroup.groups.GroupMasterKey
 import org.signal.libsignal.zkgroup.groups.GroupSecretParams
 import org.signal.libsignal.zkgroup.groupsend.GroupSendEndorsement
 import org.signal.libsignal.zkgroup.groupsend.GroupSendFullToken
+import org.signal.storageservice.storage.protos.groups.AccessControl
 import org.signal.storageservice.storage.protos.groups.Member
 import org.signal.storageservice.storage.protos.groups.local.DecryptedGroup
+import org.signal.storageservice.storage.protos.groups.local.DecryptedMember
 import org.signal.storageservice.storage.protos.groups.local.DecryptedPendingMember
 import org.thoughtcrime.securesms.contacts.paged.ContactSearchSortOrder
 import org.thoughtcrime.securesms.contacts.paged.collections.ContactSearchIterator
@@ -1295,6 +1297,24 @@ class GroupTable(context: Context?, databaseHelper: SignalDatabase?) :
         }
       }
     }
+
+    fun nonAdminMembersWithLabels(): List<DecryptedMember> {
+      return decryptedGroup.members
+        .filter { it.role != Member.Role.ADMINISTRATOR && it.hasLabel() }
+    }
+
+    /**
+     * Returns true if demoting [aci] from admin should cause their member label to be cleared.
+     */
+    fun adminDemotionClearsLabel(aci: ACI): Boolean {
+      val accessRequired = decryptedGroup.accessControl?.memberLabel ?: AccessControl.AccessRequired.UNKNOWN
+      return when {
+        accessRequired != AccessControl.AccessRequired.ADMINISTRATOR -> false
+        else -> decryptedGroup.members.findMemberByAci(aci).orNull()?.hasLabel() == true
+      }
+    }
+
+    private fun DecryptedMember.hasLabel(): Boolean = labelString.isNotBlank() || labelEmoji.isNotBlank()
   }
 
   @Throws(BadGroupIdException::class)
diff --git a/app/src/main/java/org/thoughtcrime/securesms/groups/GroupManagerV2.java b/app/src/main/java/org/thoughtcrime/securesms/groups/GroupManagerV2.java
index 47cdcd0fa1..63540d2dbb 100644
--- a/app/src/main/java/org/thoughtcrime/securesms/groups/GroupManagerV2.java
+++ b/app/src/main/java/org/thoughtcrime/securesms/groups/GroupManagerV2.java
@@ -322,11 +322,27 @@ final class GroupManagerV2 {
     }
 
     @WorkerThread
-    @NonNull GroupManager.GroupActionResult updateMemberLabelRights(@NonNull GroupAccessControl newRights)
+    @NonNull
+    GroupManager.GroupActionResult updateMemberLabelRights(@NonNull GroupAccessControl newRights)
         throws GroupChangeFailedException, GroupInsufficientRightsException, IOException, GroupNotAMemberException
     {
-      AccessControl.AccessRequired accessRequired = rightsToAccessControl(newRights);
-      return commitChangeWithConflictResolution(selfAci, groupOperations.createChangeMemberLabelRights(accessRequired));
+      AccessControl.AccessRequired newAccess      = rightsToAccessControl(newRights);
+      GroupChange.Actions.Builder  change         = groupOperations.createChangeMemberLabelRights(newAccess);
+      DecryptedGroup               decryptedGroup = v2GroupProperties.getDecryptedGroup();
+      AccessControl.AccessRequired currentAccess  = decryptedGroup.accessControl != null ? decryptedGroup.accessControl.memberLabel : AccessControl.AccessRequired.UNKNOWN;
+
+      if (newAccess == AccessControl.AccessRequired.ADMINISTRATOR && currentAccess != AccessControl.AccessRequired.ADMINISTRATOR) {
+        List<ACI> membersWithLabelsToClear = v2GroupProperties.nonAdminMembersWithLabels()
+            .stream()
+            .map(member -> ACI.parseOrNull(member.aciBytes))
+            .filter(Objects::nonNull)
+            .collect(Collectors.toList());
+
+        if (!membersWithLabelsToClear.isEmpty()) {
+          change.modifyMemberLabels(groupOperations.createRemoveMemberLabelsChange(membersWithLabelsToClear).modifyMemberLabels);
+        }
+      }
+      return commitChangeWithConflictResolution(selfAci, change);
     }
 
     @WorkerThread
@@ -338,7 +354,7 @@ final class GroupManagerV2 {
 
     @WorkerThread
     @NonNull GroupManager.GroupActionResult updateGroupTitleDescriptionAndAvatar(@Nullable String title, @Nullable String description, @Nullable byte[] avatarBytes, boolean avatarChanged)
-      throws GroupChangeFailedException, GroupInsufficientRightsException, IOException, GroupNotAMemberException
+        throws GroupChangeFailedException, GroupInsufficientRightsException, IOException, GroupNotAMemberException
     {
       try {
         GroupChange.Actions.Builder change = title != null ? groupOperations.createModifyGroupTitle(title)
@@ -409,8 +425,14 @@ final class GroupManagerV2 {
                                                            boolean admin)
         throws GroupChangeFailedException, GroupInsufficientRightsException, IOException, GroupNotAMemberException
     {
-      Recipient recipient = Recipient.resolved(recipientId);
-      return commitChangeWithConflictResolution(selfAci, groupOperations.createChangeMemberRole(recipient.requireAci(), admin ? Member.Role.ADMINISTRATOR : Member.Role.DEFAULT));
+      Recipient recipient    = Recipient.resolved(recipientId);
+      ACI       recipientAci = recipient.requireAci();
+
+      GroupChange.Actions.Builder change = groupOperations.createChangeMemberRole(recipientAci, admin ? Member.Role.ADMINISTRATOR : Member.Role.DEFAULT);
+      if (!admin && v2GroupProperties.adminDemotionClearsLabel(recipientAci)) {
+        change.modifyMemberLabels(groupOperations.createRemoveMemberLabelsChange(Collections.singletonList(recipientAci)).modifyMemberLabels);
+      }
+      return commitChangeWithConflictResolution(selfAci, change);
     }
 
     @WorkerThread
@@ -1261,7 +1283,7 @@ final class GroupManagerV2 {
 
       throw new GroupChangeFailedException("Unable to cancel group join request after conflicts");
     }
-}
+  }
 
   private abstract static class LockOwner implements Closeable {
     final Closeable lock;
@@ -1339,16 +1361,11 @@ final class GroupManagerV2 {
   }
 
   private static @NonNull AccessControl.AccessRequired rightsToAccessControl(@NonNull GroupAccessControl rights) {
-    switch (rights){
-      case ALL_MEMBERS:
-        return AccessControl.AccessRequired.MEMBER;
-      case ONLY_ADMINS:
-        return AccessControl.AccessRequired.ADMINISTRATOR;
-      case NO_ONE:
-        return AccessControl.AccessRequired.UNSATISFIABLE;
-      default:
-      throw new AssertionError();
-    }
+    return switch (rights) {
+      case ALL_MEMBERS -> AccessControl.AccessRequired.MEMBER;
+      case ONLY_ADMINS -> AccessControl.AccessRequired.ADMINISTRATOR;
+      case NO_ONE -> AccessControl.AccessRequired.UNSATISFIABLE;
+    };
   }
 
   static class RecipientAndThread {
diff --git a/app/src/main/java/org/thoughtcrime/securesms/recipients/ui/bottomsheet/RecipientDialogRepository.java b/app/src/main/java/org/thoughtcrime/securesms/recipients/ui/bottomsheet/RecipientDialogRepository.java
index e2528c3232..808da67248 100644
--- a/app/src/main/java/org/thoughtcrime/securesms/recipients/ui/bottomsheet/RecipientDialogRepository.java
+++ b/app/src/main/java/org/thoughtcrime/securesms/recipients/ui/bottomsheet/RecipientDialogRepository.java
@@ -6,7 +6,9 @@ import androidx.annotation.NonNull;
 import androidx.annotation.Nullable;
 import androidx.core.util.Consumer;
 
+import org.signal.core.models.ServiceId;
 import org.signal.core.util.concurrent.SignalExecutors;
+import org.signal.core.util.concurrent.SimpleTask;
 import org.signal.core.util.logging.Log;
 import org.thoughtcrime.securesms.contacts.sync.ContactDiscovery;
 import org.thoughtcrime.securesms.database.GroupTable;
@@ -21,7 +23,6 @@ import org.thoughtcrime.securesms.groups.ui.GroupChangeErrorCallback;
 import org.thoughtcrime.securesms.groups.ui.GroupChangeFailureReason;
 import org.thoughtcrime.securesms.recipients.Recipient;
 import org.thoughtcrime.securesms.recipients.RecipientId;
-import org.signal.core.util.concurrent.SimpleTask;
 
 import java.io.IOException;
 import java.util.ArrayList;
@@ -104,6 +105,24 @@ final class RecipientDialogRepository {
                    onComplete::accept);
   }
 
+  void willAdminDemotionClearLabel(@NonNull Consumer<Boolean> onComplete) {
+    SimpleTask.BackgroundTask<Boolean> hasLabelToClear = () -> {
+      if (groupId == null || !groupId.isV2()) {
+        return false;
+      }
+
+      GroupRecord   groupRecord = SignalDatabase.groups().getGroup(groupId.requireV2()).orElse(null);
+      ServiceId.ACI aci         = Recipient.resolved(recipientId).getAci().orElse(null);
+
+      if (groupRecord != null && aci != null) {
+        return groupRecord.requireV2GroupProperties().adminDemotionClearsLabel(aci);
+      }
+      return false;
+    };
+
+    SimpleTask.run(SignalExecutors.UNBOUNDED, hasLabelToClear, onComplete::accept);
+  }
+
   void getGroupMembership(@NonNull Consumer<List<RecipientId>> onComplete) {
     SimpleTask.run(SignalExecutors.UNBOUNDED,
                    () -> {
diff --git a/app/src/main/java/org/thoughtcrime/securesms/recipients/ui/bottomsheet/RecipientDialogViewModel.java b/app/src/main/java/org/thoughtcrime/securesms/recipients/ui/bottomsheet/RecipientDialogViewModel.java
index d1650f706b..abe455f2c0 100644
--- a/app/src/main/java/org/thoughtcrime/securesms/recipients/ui/bottomsheet/RecipientDialogViewModel.java
+++ b/app/src/main/java/org/thoughtcrime/securesms/recipients/ui/bottomsheet/RecipientDialogViewModel.java
@@ -4,6 +4,7 @@ import android.app.Activity;
 import android.content.Context;
 import android.widget.Toast;
 
+import androidx.annotation.MainThread;
 import androidx.annotation.NonNull;
 import androidx.annotation.Nullable;
 import androidx.annotation.WorkerThread;
@@ -263,22 +264,30 @@ final class RecipientDialogViewModel extends ViewModel {
         .show();
   }
 
+  @MainThread
   void onRemoveGroupAdminClicked(@NonNull Activity activity) {
-    new MaterialAlertDialogBuilder(activity)
-        .setMessage(context.getString(R.string.RecipientBottomSheet_remove_s_as_group_admin, Objects.requireNonNull(recipient.getValue()).getDisplayName(context)))
-        .setPositiveButton(R.string.RecipientBottomSheet_remove_as_admin,
-                           (dialog, which) -> {
-                             adminActionBusy.setValue(true);
-                             recipientDialogRepository.setMemberAdmin(false, result -> {
-                                                                        adminActionBusy.setValue(false);
-                                                                        if (!result) {
-                                                                          Toast.makeText(activity, R.string.ManageGroupActivity_failed_to_update_the_group, Toast.LENGTH_SHORT).show();
-                                                                        }
-                                                                      },
-                                                                      this::showErrorToast);
-                           })
-        .setNegativeButton(android.R.string.cancel, (dialog, which) -> {})
-        .show();
+    Recipient groupMember = Objects.requireNonNull(recipient.getValue());
+
+    recipientDialogRepository.willAdminDemotionClearLabel(willDemotionClearLabel -> {
+      int messageRes = willDemotionClearLabel ? R.string.RecipientBottomSheet_remove_s_as_group_admin_and_clear_member_label
+                                              : R.string.RecipientBottomSheet_remove_s_as_group_admin;
+
+      new MaterialAlertDialogBuilder(activity)
+          .setMessage(context.getString(messageRes, groupMember.getDisplayName(context)))
+          .setPositiveButton(R.string.RecipientBottomSheet_remove_as_admin,
+                             (dialog, which) -> {
+                               adminActionBusy.setValue(true);
+                               recipientDialogRepository.setMemberAdmin(false, result -> {
+                                                                          adminActionBusy.setValue(false);
+                                                                          if (!result) {
+                                                                            Toast.makeText(activity, R.string.ManageGroupActivity_failed_to_update_the_group, Toast.LENGTH_SHORT).show();
+                                                                          }
+                                                                        },
+                                                                        this::showErrorToast);
+                             })
+          .setNegativeButton(android.R.string.cancel, (dialog, which) -> {})
+          .show();
+    });
   }
 
   void onRemoveFromGroupClicked(@NonNull Activity activity, boolean isLinkActive, @NonNull Runnable onSuccess) {
diff --git a/app/src/main/res/values/strings.xml b/app/src/main/res/values/strings.xml
index 0bc053b2f3..35578b86cb 100644
--- a/app/src/main/res/values/strings.xml
+++ b/app/src/main/res/values/strings.xml
@@ -5191,6 +5191,8 @@
     <string name="RecipientBottomSheet_remove_from_group">Remove from group</string>
 
     <string name="RecipientBottomSheet_remove_s_as_group_admin">Remove %1$s as group admin?</string>
+    <!-- Message shown when removing an admin will also clear their member label. -->
+    <string name="RecipientBottomSheet_remove_s_as_group_admin_and_clear_member_label">Remove %1$s as group admin? This will also clear their member label.</string>
     <string name="RecipientBottomSheet_s_will_be_able_to_edit_group">"%1$s" will be able to edit this group and its members.</string>
 
     <string name="RecipientBottomSheet_remove_s_from_the_group">Remove %1$s from the group?</string>
@@ -6032,6 +6034,12 @@
     <string name="PermissionsSettingsFragment__add_member_labels">Add member labels</string>
     <!-- Dialog title shown when choosing who has permission to add member labels in the group. -->
     <string name="PermissionsSettingsFragment__who_can_add_member_labels">Who can add member labels?</string>
+    <!-- Warning title shown before restricting member labels to admins only. -->
+    <string name="PermissionsSettingsFragment__member_labels_will_be_cleared_title">Member labels will be cleared</string>
+    <!-- Warning body shown before restricting member labels to admins only. -->
+    <string name="PermissionsSettingsFragment__member_labels_will_be_cleared_body">Changing this permission to &quot;Only admins&quot; will clear member labels set by non-admins in this group.</string>
+    <!-- Confirm button for changing member label permission after warning. -->
+    <string name="PermissionsSettingsFragment__change_permission">Change permission</string>
 
     <!-- SoundsAndNotificationsSettingsFragment -->
     <!-- Label for the setting to mute notifications for a conversation -->
diff --git a/app/src/test/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsViewModelTest.kt b/app/src/test/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsViewModelTest.kt
new file mode 100644
index 0000000000..93e60f3ed7
--- /dev/null
+++ b/app/src/test/java/org/thoughtcrime/securesms/components/settings/conversation/permissions/PermissionsSettingsViewModelTest.kt
@@ -0,0 +1,137 @@
+/*
+ * Copyright 2025 Signal Messenger, LLC
+ * SPDX-License-Identifier: AGPL-3.0-only
+ */
+
+package org.thoughtcrime.securesms.components.settings.conversation.permissions
+
+import androidx.lifecycle.MutableLiveData
+import io.mockk.every
+import io.mockk.mockk
+import io.mockk.verify
+import org.junit.Assert.assertEquals
+import org.junit.Rule
+import org.junit.Test
+import org.thoughtcrime.securesms.groups.GroupAccessControl
+import org.thoughtcrime.securesms.groups.GroupId
+import org.thoughtcrime.securesms.groups.LiveGroup
+import org.thoughtcrime.securesms.util.livedata.LiveDataRule
+import org.thoughtcrime.securesms.util.livedata.LiveDataTestUtil
+
+class PermissionsSettingsViewModelTest {
+  @get:Rule
+  val liveDataRule = LiveDataRule()
+
+  private val groupId = mockk<GroupId.V2>()
+  private val repository = mockk<PermissionsSettingsRepository>(relaxUnitFun = true)
+
+  private fun createViewModel(
+    memberLabelAccessControl: GroupAccessControl = GroupAccessControl.ONLY_ADMINS,
+    nonAdminMembersHaveLabels: Boolean = true
+  ): PermissionsSettingsViewModel {
+    val liveGroup = mockk<LiveGroup> {
+      every { isSelfAdmin } returns MutableLiveData(false)
+      every { membershipAdditionAccessControl } returns MutableLiveData(GroupAccessControl.ONLY_ADMINS)
+      every { attributesAccessControl } returns MutableLiveData(GroupAccessControl.ONLY_ADMINS)
+      every { isAnnouncementGroup } returns MutableLiveData(false)
+      every { this@mockk.memberLabelAccessControl } returns MutableLiveData(memberLabelAccessControl)
+    }
+
+    every { repository.hasNonAdminMembersWithLabels(groupId) } returns nonAdminMembersHaveLabels
+
+    return PermissionsSettingsViewModel(
+      groupId = groupId,
+      repository = repository,
+      liveGroup = liveGroup
+    )
+  }
+
+  @Test
+  fun `onMemberLabelPermissionChangeRequested immediately applies 'only admins' change when there are no non-admin members with labels`() {
+    val viewModel = createViewModel(
+      memberLabelAccessControl = GroupAccessControl.ALL_MEMBERS,
+      nonAdminMembersHaveLabels = false
+    )
+
+    viewModel.onMemberLabelPermissionChangeRequested(nonAdminCanSetMemberLabel = false)
+
+    verify {
+      repository.applyMemberLabelRightsChange(
+        groupId = groupId,
+        newRights = GroupAccessControl.ONLY_ADMINS,
+        errorCallback = any()
+      )
+    }
+    LiveDataTestUtil.assertNoValue(viewModel.events)
+  }
+
+  @Test
+  fun `onMemberLabelPermissionChangeRequested immediately applies 'all members' change when there are no non-admin members with labels`() {
+    val viewModel = createViewModel(
+      memberLabelAccessControl = GroupAccessControl.ONLY_ADMINS,
+      nonAdminMembersHaveLabels = false
+    )
+
+    viewModel.onMemberLabelPermissionChangeRequested(nonAdminCanSetMemberLabel = true)
+
+    verify {
+      repository.applyMemberLabelRightsChange(
+        groupId = groupId,
+        newRights = GroupAccessControl.ALL_MEMBERS,
+        errorCallback = any()
+      )
+    }
+    LiveDataTestUtil.assertNoValue(viewModel.events)
+  }
+
+  @Test
+  fun `onMemberLabelPermissionChangeRequested displays warning when restricting to 'only admins' and some non-admin members have labels`() {
+    val viewModel = createViewModel(
+      memberLabelAccessControl = GroupAccessControl.ALL_MEMBERS,
+      nonAdminMembersHaveLabels = true
+    )
+
+    viewModel.onMemberLabelPermissionChangeRequested(nonAdminCanSetMemberLabel = false)
+
+    assertEquals(
+      PermissionsSettingsEvents.ShowMemberLabelsWillBeRemovedWarning,
+      LiveDataTestUtil.observeAndGetOneValue(viewModel.events)
+    )
+
+    verify(exactly = 0) {
+      repository.applyMemberLabelRightsChange(any(), any(), any())
+    }
+  }
+
+  @Test
+  fun `onMemberLabelPermissionChangeRequested immediately applies 'all members' change when some non-admin members have labels`() {
+    val viewModel = createViewModel(memberLabelAccessControl = GroupAccessControl.ALL_MEMBERS, nonAdminMembersHaveLabels = true)
+
+    viewModel.onMemberLabelPermissionChangeRequested(nonAdminCanSetMemberLabel = true)
+
+    verify {
+      repository.applyMemberLabelRightsChange(
+        groupId = groupId,
+        newRights = GroupAccessControl.ALL_MEMBERS,
+        errorCallback = any()
+      )
+    }
+    LiveDataTestUtil.assertNoValue(viewModel.events)
+  }
+
+  @Test
+  fun `onRestrictMemberLabelsToAdminsConfirmed applies 'only admins' change`() {
+    val viewModel = createViewModel(memberLabelAccessControl = GroupAccessControl.ALL_MEMBERS, nonAdminMembersHaveLabels = true)
+
+    viewModel.onRestrictMemberLabelsToAdminsConfirmed()
+
+    verify {
+      repository.applyMemberLabelRightsChange(
+        groupId = groupId,
+        newRights = GroupAccessControl.ONLY_ADMINS,
+        errorCallback = any()
+      )
+    }
+    LiveDataTestUtil.assertNoValue(viewModel.events)
+  }
+}
diff --git a/app/src/test/java/org/thoughtcrime/securesms/database/GroupTestUtil.kt b/app/src/test/java/org/thoughtcrime/securesms/database/GroupTestUtil.kt
index fa63b5f123..fc63193870 100644
--- a/app/src/test/java/org/thoughtcrime/securesms/database/GroupTestUtil.kt
+++ b/app/src/test/java/org/thoughtcrime/securesms/database/GroupTestUtil.kt
@@ -95,6 +95,18 @@ class GroupChangeData(private val revision: Int, private val groupOperations: Gr
   fun modifyRole(serviceId: ServiceId, role: Member.Role) {
     actionsBuilder.modifyMemberRoles += GroupChange.Actions.ModifyMemberRoleAction(userId = groupOperations.encryptServiceId(serviceId), role = role)
   }
+
+  fun clearMemberLabel(serviceId: ServiceId) {
+    actionsBuilder.modifyMemberLabels += GroupChange.Actions.ModifyMemberLabelAction(
+      userId = groupOperations.encryptServiceId(serviceId),
+      labelEmoji = okio.ByteString.EMPTY,
+      labelString = okio.ByteString.EMPTY
+    )
+  }
+
+  fun changeMemberLabelAccess(access: AccessControl.AccessRequired) {
+    actionsBuilder.modifyMemberLabelAccess = GroupChange.Actions.ModifyMemberLabelAccessControlAction(memberLabelAccess = access)
+  }
 }
 
 class GroupStateTestData(private val masterKey: GroupMasterKey, private val groupOperations: GroupsV2Operations.GroupOperations? = null) {
diff --git a/app/src/test/java/org/thoughtcrime/securesms/groups/GroupManagerV2Test_edit.kt b/app/src/test/java/org/thoughtcrime/securesms/groups/GroupManagerV2Test_edit.kt
index baa0b143d8..504e2de9c0 100644
--- a/app/src/test/java/org/thoughtcrime/securesms/groups/GroupManagerV2Test_edit.kt
+++ b/app/src/test/java/org/thoughtcrime/securesms/groups/GroupManagerV2Test_edit.kt
@@ -28,17 +28,20 @@ import org.signal.libsignal.protocol.logging.SignalProtocolLogger
 import org.signal.libsignal.protocol.logging.SignalProtocolLoggerProvider
 import org.signal.libsignal.zkgroup.groups.GroupMasterKey
 import org.signal.libsignal.zkgroup.groups.GroupSecretParams
+import org.signal.storageservice.storage.protos.groups.AccessControl
 import org.signal.storageservice.storage.protos.groups.GroupChangeResponse
 import org.signal.storageservice.storage.protos.groups.Member
 import org.signal.storageservice.storage.protos.groups.local.DecryptedGroup
 import org.thoughtcrime.securesms.TestZkGroupServer
 import org.thoughtcrime.securesms.database.GroupStateTestData
 import org.thoughtcrime.securesms.database.GroupTable
+import org.thoughtcrime.securesms.database.RecipientDatabaseTestUtils
 import org.thoughtcrime.securesms.database.model.databaseprotos.member
 import org.thoughtcrime.securesms.groups.v2.GroupCandidateHelper
 import org.thoughtcrime.securesms.keyvalue.SignalStore
 import org.thoughtcrime.securesms.logging.CustomSignalProtocolLogger
 import org.thoughtcrime.securesms.recipients.Recipient
+import org.thoughtcrime.securesms.recipients.RecipientId
 import org.thoughtcrime.securesms.testutil.MockAppDependenciesRule
 import org.thoughtcrime.securesms.testutil.SystemOutLogger
 import org.thoughtcrime.securesms.util.RemoteConfig
@@ -62,6 +65,7 @@ class GroupManagerV2Test_edit {
     val selfPni: PNI = PNI.from(UUID.randomUUID())
     val serviceIds: ServiceIds = ServiceIds(selfAci, selfPni)
     val otherAci: ACI = ACI.from(UUID.randomUUID())
+    val otherAci2: ACI = ACI.from(UUID.randomUUID())
   }
 
   @get:Rule
@@ -83,6 +87,8 @@ class GroupManagerV2Test_edit {
     mockkObject(RemoteConfig)
     mockkStatic(RemoteConfig::class)
     mockkObject(SignalStore)
+    mockkObject(Recipient)
+    mockkStatic(Recipient::class)
     every { RemoteConfig.internalUser } returns false
 
     ThreadUtil.enforceAssertions = false
@@ -126,6 +132,7 @@ class GroupManagerV2Test_edit {
     every { groupTable.update(any<GroupId.V2>(), any(), any()) } returns Unit
     every { sendGroupUpdateHelper.sendGroupUpdate(masterKey, any(), any(), any()) } returns GroupManagerV2.RecipientAndThread(Recipient.UNKNOWN, 1)
     every { groupsV2API.patchGroup(any(), any(), any()) } returns GroupChangeResponse(group_change = data.groupChange!!)
+    every { Recipient.externalGroupExact(groupId) } returns RecipientDatabaseTestUtils.createRecipient(resolved = true)
   }
 
   private fun editGroup(perform: GroupManagerV2.GroupEditor.() -> Unit) {
@@ -165,4 +172,142 @@ class GroupManagerV2Test_edit {
       assertThat(patchedGroup.members.find { it.aciBytes == otherAci.toByteString() }?.role, "Other is now an admin in the group").isEqualTo(Member.Role.ADMINISTRATOR)
     }
   }
+
+  @Test
+  fun `demoting an admin who has a label clears the label when label access is restricted to only admins`() {
+    val otherRecipientId = RecipientId.from(200)
+    val otherRecipient = RecipientDatabaseTestUtils.createRecipient(recipientId = otherRecipientId, serviceId = otherAci, resolved = true)
+
+    every { Recipient.resolved(otherRecipientId) } returns otherRecipient
+
+    given {
+      localState(
+        revision = 5,
+        accessControl = AccessControl(memberLabel = AccessControl.AccessRequired.ADMINISTRATOR),
+        members = listOf(
+          member(selfAci, role = Member.Role.ADMINISTRATOR),
+          member(otherAci, role = Member.Role.ADMINISTRATOR, labelString = "Team Lead")
+        )
+      )
+
+      groupChange(6) {
+        source(selfAci)
+        modifyRole(otherAci, Member.Role.DEFAULT)
+        clearMemberLabel(otherAci)
+      }
+    }
+
+    editGroup {
+      setMemberAdmin(otherRecipientId, false)
+    }
+
+    then { patchedGroup ->
+      val other = patchedGroup.members.find { it.aciBytes == otherAci.toByteString() }!!
+      assertThat(other.role, "Other is demoted to default").isEqualTo(Member.Role.DEFAULT)
+      assertThat(other.labelString, "Label text is cleared").isEqualTo("")
+      assertThat(other.labelEmoji, "Label emoji is cleared").isEqualTo("")
+    }
+  }
+
+  @Test
+  fun `demoting an admin who has a label does not clear the label when label access is open to all members`() {
+    val otherRecipientId = RecipientId.from(201)
+    val otherRecipient = RecipientDatabaseTestUtils.createRecipient(recipientId = otherRecipientId, serviceId = otherAci, resolved = true)
+
+    every { Recipient.resolved(otherRecipientId) } returns otherRecipient
+
+    given {
+      localState(
+        revision = 5,
+        accessControl = AccessControl(memberLabel = AccessControl.AccessRequired.MEMBER),
+        members = listOf(
+          member(selfAci, role = Member.Role.ADMINISTRATOR),
+          member(otherAci, role = Member.Role.ADMINISTRATOR, labelString = "Team Lead")
+        )
+      )
+
+      groupChange(6) {
+        source(selfAci)
+        modifyRole(otherAci, Member.Role.DEFAULT)
+      }
+    }
+
+    editGroup {
+      setMemberAdmin(otherRecipientId, false)
+    }
+
+    then { patchedGroup ->
+      val other = patchedGroup.members.find { it.aciBytes == otherAci.toByteString() }!!
+      assertThat(other.role, "Other is demoted to default").isEqualTo(Member.Role.DEFAULT)
+      assertThat(other.labelString, "Label text is preserved").isEqualTo("Team Lead")
+    }
+  }
+
+  @Test
+  fun `restricting label access to admins only clears non-admins that have labels set`() {
+    given {
+      localState(
+        revision = 5,
+        accessControl = AccessControl(memberLabel = AccessControl.AccessRequired.MEMBER),
+        members = listOf(
+          member(selfAci, role = Member.Role.ADMINISTRATOR),
+          member(otherAci, role = Member.Role.DEFAULT, labelString = "Foo"),
+          member(otherAci2, role = Member.Role.DEFAULT, labelString = "Bar")
+        )
+      )
+
+      groupChange(6) {
+        source(selfAci)
+        changeMemberLabelAccess(AccessControl.AccessRequired.ADMINISTRATOR)
+        clearMemberLabel(otherAci)
+        clearMemberLabel(otherAci2)
+      }
+    }
+
+    editGroup {
+      updateMemberLabelRights(GroupAccessControl.ONLY_ADMINS)
+    }
+
+    then { patchedGroup ->
+      val other = patchedGroup.members.find { it.aciBytes == otherAci.toByteString() }!!
+      assertThat(other.labelString, "Other's label text is cleared").isEqualTo("")
+      assertThat(other.labelEmoji, "Other's label emoji is cleared").isEqualTo("")
+
+      val other2 = patchedGroup.members.find { it.aciBytes == otherAci2.toByteString() }!!
+      assertThat(other2.labelString, "Other2's label text is cleared").isEqualTo("")
+      assertThat(other2.labelEmoji, "Other2's label emoji is cleared").isEqualTo("")
+    }
+  }
+
+  @Test
+  fun `restricting label access to admins only does not modify labels of admins that have labels set`() {
+    given {
+      localState(
+        revision = 5,
+        accessControl = AccessControl(memberLabel = AccessControl.AccessRequired.MEMBER),
+        members = listOf(
+          member(selfAci, role = Member.Role.ADMINISTRATOR),
+          member(otherAci, role = Member.Role.ADMINISTRATOR, labelString = "Foo"),
+          member(otherAci2, role = Member.Role.ADMINISTRATOR, labelString = "Bar")
+        )
+      )
+
+      groupChange(6) {
+        source(selfAci)
+        changeMemberLabelAccess(AccessControl.AccessRequired.ADMINISTRATOR)
+      }
+    }
+
+    editGroup {
+      updateMemberLabelRights(GroupAccessControl.ONLY_ADMINS)
+    }
+
+    then { patchedGroup ->
+      val other = patchedGroup.members.find { it.aciBytes == otherAci.toByteString() }!!
+      assertThat(other.labelString, "Other's label text is preserved").isEqualTo("Foo")
+
+      val other2 = patchedGroup.members.find { it.aciBytes == otherAci2.toByteString() }!!
+      assertThat(other2.labelString, "Other2's label text is preserved").isEqualTo("Bar")
+    }
+  }
 }
diff --git a/lib/libsignal-service/src/main/java/org/whispersystems/signalservice/api/groupsv2/GroupsV2Operations.java b/lib/libsignal-service/src/main/java/org/whispersystems/signalservice/api/groupsv2/GroupsV2Operations.java
index fffab844b3..79da821de5 100644
--- a/lib/libsignal-service/src/main/java/org/whispersystems/signalservice/api/groupsv2/GroupsV2Operations.java
+++ b/lib/libsignal-service/src/main/java/org/whispersystems/signalservice/api/groupsv2/GroupsV2Operations.java
@@ -1120,6 +1120,21 @@ public final class GroupsV2Operations {
       );
     }
 
+    public GroupChange.Actions.Builder createRemoveMemberLabelsChange(@Nonnull List<ACI> acis) {
+      List<GroupChange.Actions.ModifyMemberLabelAction> actions = acis
+          .stream()
+          .map(memberAci ->
+                   new GroupChange.Actions.ModifyMemberLabelAction.Builder()
+                       .userId(encryptServiceId(memberAci))
+                       .labelEmoji(ByteString.EMPTY)
+                       .labelString(ByteString.EMPTY)
+                       .build()
+          )
+          .collect(Collectors.toList());
+
+      return new GroupChange.Actions.Builder().modifyMemberLabels(actions);
+    }
+
     public List<ServiceId> decryptAddMembers(List<GroupChange.Actions.AddMemberAction> addMembers) throws InvalidGroupStateException, InvalidInputException, VerificationFailedException {
       List<ServiceId> ids = new ArrayList<>(addMembers.size());
       for (GroupChange.Actions.AddMemberAction addMember : addMembers) {