diff --git a/awx/ui_next/src/screens/Template/shared/LabelSelect.jsx b/awx/ui_next/src/screens/Template/shared/LabelSelect.jsx
index 68cce85193..33830fe8bb 100644
--- a/awx/ui_next/src/screens/Template/shared/LabelSelect.jsx
+++ b/awx/ui_next/src/screens/Template/shared/LabelSelect.jsx
@@ -1,8 +1,17 @@
 import React, { useState, useEffect } from 'react';
 import { func, arrayOf, number, shape, string, oneOfType } from 'prop-types';
-import MultiSelect from '@components/MultiSelect';
+import { Select, SelectOption, SelectVariant } from '@patternfly/react-core';
 import { LabelsAPI } from '@api';
 
+function setToString(labels) {
+  labels.forEach(label => {
+    label.toString = function toString() {
+      return this.id;
+    };
+  });
+  return labels;
+}
+
 async function loadLabelOptions(setLabels, onError) {
   let labels;
   try {
@@ -11,7 +20,7 @@ async function loadLabelOptions(setLabels, onError) {
       page_size: 200,
       order_by: 'name',
     });
-    labels = data.results;
+    labels = setToString(data.results);
     setLabels(labels);
     if (data.next && data.next.includes('page=2')) {
       const {
@@ -21,31 +30,71 @@ async function loadLabelOptions(setLabels, onError) {
         page_size: 200,
         order_by: 'name',
       });
-      labels = labels.concat(results);
+      setLabels(labels.concat(setToString(results)));
     }
-    setLabels(labels);
   } catch (err) {
     onError(err);
   }
 }
 
-function LabelSelect({ value, onChange, onError }) {
+function LabelSelect({ value, placeholder, onChange, onError }) {
   const [options, setOptions] = useState([]);
+  const [currentValue, setCurrentValue] = useState([]);
+  const [isExpanded, setIsExpanded] = useState(false);
+
+  const toggleExpanded = () => {
+    setIsExpanded(!isExpanded);
+  };
+
+  const handleSelect = (event, item) => {
+    if (currentValue.includes(item)) {
+      onChange(currentValue.filter(i => i.id !== item.id));
+    } else {
+      onChange(currentValue.concat(item));
+    }
+  };
+
   useEffect(() => {
     loadLabelOptions(setOptions, onError);
   }, [onError]);
 
+  useEffect(() => {
+    if (value !== currentValue && options.length) {
+      const syncedValue = value.map(item =>
+        options.find(i => i.id === item.id)
+      );
+      setCurrentValue(syncedValue);
+    }
+    /* eslint-disable-next-line react-hooks/exhaustive-deps */
+  }, [value, options]);
+
+  const renderOptions = opts => {
+    return opts.map(option => (
+      <SelectOption key={option.id} value={option}>
+        {option.name}
+      </SelectOption>
+    ));
+  };
+
   return (
-    <MultiSelect
-      onChange={onChange}
-      value={value}
-      options={options}
-      createNewItem={name => ({
-        id: name,
-        name,
-        isNew: true,
-      })}
-    />
+    <Select
+      variant={SelectVariant.typeaheadMulti}
+      aria-label="Select a state"
+      onToggle={toggleExpanded}
+      onSelect={handleSelect}
+      onClear={() => onChange([])}
+      onFilter={event => {
+        const str = event.target.value.toLowerCase();
+        const matches = options.filter(o => o.name.toLowerCase().includes(str));
+        return renderOptions(matches);
+      }}
+      selections={options.length ? setToString(currentValue) : []}
+      isExpanded={isExpanded}
+      ariaLabelledBy="label-select"
+      placeholderText={placeholder}
+    >
+      {renderOptions(options)}
+    </Select>
   );
 }
 LabelSelect.propTypes = {
@@ -55,7 +104,12 @@ LabelSelect.propTypes = {
       name: string.isRequired,
     })
   ).isRequired,
+  placeholder: string,
+  onChange: func.isRequired,
   onError: func.isRequired,
 };
+LabelSelect.defaultProps = {
+  placeholder: '',
+};
 
 export default LabelSelect;