Conversation labels allow you to organize your conversations into groups (e.g. Work, Personal, School, Project X etc) and one conversation can have more than one label attached to it.
To add or remove a conversation label, open the conversation. On the right side of the conversation header there you will see the label icon, and the name(s) of the label(s) that have been added, if there are any. Once you click on that icon, you will be able to add or remove labels.
When you click on the tiny label icon, a drop-down window will appear. In this popup, you can add and remove labels by simply ticking or unticking the respective boxes:
You can also create new labels, or follow the link to the Manage labels view.
In the Manage labels view you can edit and delete existing labels, as well as organize your labels:
Read more from our blog: Manage your conversations with labels