diff --git a/CHANGELOG.md b/CHANGELOG.md
index b28a011..56c486d 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -17,6 +17,11 @@ Versions follow [Semantic Versioning](https://semver.org/).
 
 ## [Unreleased]
 
+### Added
+
+- Sandbox labels on create and response models, AND-matched label filtering in
+  `list_sandboxes()`, and label merging through `SandboxInstance.set_labels()`.
+
 ### Fixed
 
 - Redact plaintext sandbox access tokens from response representations to
diff --git a/README.md b/README.md
index 9e6c794..b8244a4 100644
--- a/README.md
+++ b/README.md
@@ -64,6 +64,27 @@ Timeout and retry delays are in seconds.
 As an alternative, `Client()` reads `CREATEOS_API_KEY` and
 `CREATEOS_SANDBOX_BASE_URL`. Explicit constructor arguments take precedence.
 
+## Organize sandboxes with labels
+
+```python
+from createos import CreateSandboxRequest, ListSandboxesOptions
+
+sandbox = client.create_sandbox(
+    CreateSandboxRequest(
+        shape="s-1vcpu-1gb",
+        rootfs="alpine:3.20",
+        labels={"team": "backend", "environment": "test"},
+    )
+)
+matches = client.list_sandboxes(
+    ListSandboxesOptions(labels={"team": "backend"})
+)
+sandbox.set_labels({"environment": "production"})
+```
+
+List filters use AND semantics. `set_labels()` merges the supplied keys into
+the existing label map.
+
 ## Delegate access to one sandbox
 
 The owner can create one token for a sandbox. Creation and rotation return the
diff --git a/src/createos/client.py b/src/createos/client.py
index fd50ada..d67d8fa 100644
--- a/src/createos/client.py
+++ b/src/createos/client.py
@@ -2,6 +2,7 @@
 
 from __future__ import annotations
 
+import json
 import os
 from urllib.parse import quote
 
@@ -142,6 +143,7 @@ def create_sandbox(
             ingress_enabled=request.ingress_enabled,
             ingress_url_template=created.ingress_url_template,
             name=created.name,
+            labels=created.labels,
             spawn_milliseconds=created.spawn_milliseconds,
             shape=created.shape,
             rootfs=created.rootfs,
@@ -169,6 +171,10 @@ def list_sandboxes(
         """Return sandbox handles visible to the caller."""
         options = options or ListSandboxesOptions()
         params = {"status": str(options.status)} if options.status else {}
+        if options.labels:
+            params["labels"] = json.dumps(
+                options.labels, separators=(",", ":"), sort_keys=True
+            )
         items: list[Sandbox] = []
         offset = 0
         while options.limit <= 0 or len(items) < options.limit:
diff --git a/src/createos/instance.py b/src/createos/instance.py
index 5ceec36..a35baae 100644
--- a/src/createos/instance.py
+++ b/src/createos/instance.py
@@ -181,6 +181,14 @@ def set_ingress(self, enabled: bool) -> SandboxInstance:
         self._update(_one(Sandbox, data))
         return self
 
+    def set_labels(self, labels: dict[str, str]) -> SandboxInstance:
+        """Merge labels into the sandbox's existing labels."""
+        data = self._transport.request(
+            "PATCH", self._path(""), body={"labels": labels}
+        )
+        self._update(_one(Sandbox, data))
+        return self
+
     def set_auto_pause(self, timeout: float | None) -> SandboxInstance:
         """Set the idle timeout in seconds, or disable it with ``None``."""
         body: dict[str, bool | int]
diff --git a/src/createos/models.py b/src/createos/models.py
index 16ce737..c235cc3 100644
--- a/src/createos/models.py
+++ b/src/createos/models.py
@@ -238,6 +238,9 @@ class CreateSandboxRequest(Model):
     shape: str = ""
     rootfs: str = _json("rootfs", omit_default=True, default="")
     name: str = _json("name", omit_default=True, default="")
+    labels: dict[str, str] = _json(
+        "labels", omit_default=True, default_factory=dict
+    )
     networks: list[NetworkEntry] = _json(
         "networks", omit_default=True, default_factory=list
     )
@@ -430,6 +433,7 @@ class RequestOptions:
 class ListSandboxesOptions(RequestOptions):
     limit: int = 0
     status: SandboxStatus | None = None
+    labels: dict[str, str] = field(default_factory=dict)
 
 
 @dataclass(slots=True)
@@ -547,6 +551,7 @@ class CreateSandboxResponse(Model):
     id: str
     status: SandboxStatus
     name: str | None = None
+    labels: dict[str, str] = field(default_factory=dict)
     ip_address: str = _json("ip", default="")
     shape: str = ""
     rootfs: str | None = None
@@ -571,6 +576,7 @@ class Sandbox(Model):
     ingress_enabled: bool = False
     ingress_url_template: str = ""
     name: str | None = None
+    labels: dict[str, str] = field(default_factory=dict)
     running_at: datetime | None = None
     destroyed_at: datetime | None = None
     spawn_milliseconds: float = _json("spawn_ms", default=0.0)
diff --git a/tests/test_sdk.py b/tests/test_sdk.py
index 58a2f8f..4a6b240 100644
--- a/tests/test_sdk.py
+++ b/tests/test_sdk.py
@@ -13,10 +13,13 @@
     CreateSandboxRequest,
     ExecStreamEventType,
     ForkSandboxRequest,
+    ListSandboxesOptions,
     ManagedProcessConnectEvent,
     ProtocolError,
     RequestOptions,
     RunCommandRequest,
+    Sandbox,
+    SandboxInstance,
     SandboxStatus,
 )
 
@@ -218,6 +221,7 @@ def handler(request):
                 "id": "sb-1",
                 "status": "paused",
                 "name": "demo",
+                "labels": {"team": "backend"},
                 "ip": "10.0.0.2",
                 "shape": "s-4vcpu-4gb",
                 "mem_mib": 4096,
@@ -233,12 +237,17 @@ def handler(request):
     )
     sandbox = client.create_sandbox(
         CreateSandboxRequest(
-            shape="s-4vcpu-4gb", name="demo", ingress_enabled=True
+            shape="s-4vcpu-4gb",
+            name="demo",
+            labels={"team": "backend"},
+            ingress_enabled=True,
         )
     )
     assert requests[0].url.path == "/api/v1/sandboxes"
+    assert json.loads(requests[0].content)["labels"] == {"team": "backend"}
     assert sandbox.id == "sb-1"
     assert sandbox.status is SandboxStatus.PAUSED
+    assert sandbox.data.labels == {"team": "backend"}
     assert sandbox.files and sandbox.processes and sandbox.computer.mouse
     assert sandbox.preview_url(8080) == "https://8080-sb-1.example.test"
 
@@ -339,6 +348,10 @@ def test_list_sandboxes_walks_pages():
     offsets = []
 
     def handler(request):
+        assert (
+            request.url.params["labels"]
+            == '{"environment":"test","team":"backend"}'
+        )
         offset = int(request.url.params["offset"])
         offsets.append(offset)
         rows = [
@@ -361,11 +374,42 @@ def handler(request):
         base_url="https://example.test",
         http_client=mock_client(handler),
     )
-    sandboxes = client.list_sandboxes()
+    sandboxes = client.list_sandboxes(
+        ListSandboxesOptions(labels={"team": "backend", "environment": "test"})
+    )
     assert [item.id for item in sandboxes] == ["sb-0", "sb-1", "sb-2"]
     assert offsets == [0, 2]
 
 
+def test_set_labels_patches_and_updates_state():
+    def handler(request):
+        assert request.method == "PATCH"
+        assert json.loads(request.content) == {"labels": {"team": "platform"}}
+        return envelope(
+            {
+                "id": "sb-1",
+                "status": "running",
+                "labels": {"environment": "test", "team": "platform"},
+            }
+        )
+
+    client = Client(
+        api_key="key",
+        base_url="https://example.test",
+        http_client=mock_client(handler),
+    )
+    sandbox = SandboxInstance(
+        client._transport,
+        Sandbox(id="sb-1", status=SandboxStatus.RUNNING),
+    )
+
+    sandbox.set_labels({"team": "platform"})
+    assert sandbox.data.labels == {
+        "environment": "test",
+        "team": "platform",
+    }
+
+
 def test_command_stream_projects_frames_and_accepts_sse():
     payload = (
         b': keepalive\ndata: {"stdout":"hi","stderr":"warn"}\n{"exit_code":0}\n'