diff --git a/awx/ui_next/src/api/models/JobTemplates.js b/awx/ui_next/src/api/models/JobTemplates.js
index cec450ce0d..58060371df 100644
--- a/awx/ui_next/src/api/models/JobTemplates.js
+++ b/awx/ui_next/src/api/models/JobTemplates.js
@@ -13,7 +13,6 @@ class JobTemplates extends InstanceGroupsMixin(NotificationsMixin(Base)) {
     this.disassociateLabel = this.disassociateLabel.bind(this);
     this.readCredentials = this.readCredentials.bind(this);
     this.readAccessList = this.readAccessList.bind(this);
-    this.generateLabel = this.generateLabel.bind(this);
   }
 
   launch(id, data) {
@@ -24,8 +23,11 @@ class JobTemplates extends InstanceGroupsMixin(NotificationsMixin(Base)) {
     return this.http.get(`${this.baseUrl}${id}/launch/`);
   }
 
-  associateLabel(id, label) {
-    return this.http.post(`${this.baseUrl}${id}/labels/`, label);
+  associateLabel(id, label, orgId) {
+    return this.http.post(`${this.baseUrl}${id}/labels/`, {
+      name: label.name,
+      organization: orgId,
+    });
   }
 
   disassociateLabel(id, label) {
@@ -35,15 +37,10 @@ class JobTemplates extends InstanceGroupsMixin(NotificationsMixin(Base)) {
     });
   }
 
-  generateLabel(id, label, orgId) {
-    return this.http.post(`${this.baseUrl}${id}/labels/`, {
-      name: label.name,
-      organization: orgId,
-    });
-  }
-
   readCredentials(id, params) {
-    return this.http.get(`${this.baseUrl}${id}/credentials/`, { params });
+    return this.http.get(`${this.baseUrl}${id}/credentials/`, {
+      params,
+    });
   }
 
   associateCredentials(id, credentialId) {
@@ -60,7 +57,9 @@ class JobTemplates extends InstanceGroupsMixin(NotificationsMixin(Base)) {
   }
 
   readAccessList(id, params) {
-    return this.http.get(`${this.baseUrl}${id}/access_list/`, { params });
+    return this.http.get(`${this.baseUrl}${id}/access_list/`, {
+      params,
+    });
   }
 }
 
diff --git a/awx/ui_next/src/screens/Template/JobTemplateAdd/JobTemplateAdd.jsx b/awx/ui_next/src/screens/Template/JobTemplateAdd/JobTemplateAdd.jsx
index f21887d483..f55d25bbdd 100644
--- a/awx/ui_next/src/screens/Template/JobTemplateAdd/JobTemplateAdd.jsx
+++ b/awx/ui_next/src/screens/Template/JobTemplateAdd/JobTemplateAdd.jsx
@@ -36,16 +36,10 @@ function JobTemplateAdd() {
   }
 
   function submitLabels(templateId, labels = [], organizationId) {
-    const associationPromises = labels
-      .filter(label => !label.isNew)
-      .map(label => JobTemplatesAPI.associateLabel(templateId, label));
-    const creationPromises = labels
-      .filter(label => label.isNew)
-      .map(label =>
-        JobTemplatesAPI.generateLabel(templateId, label, organizationId)
-      );
-
-    return Promise.all([...associationPromises, ...creationPromises]);
+    const associationPromises = labels.map(label =>
+      JobTemplatesAPI.associateLabel(templateId, label, organizationId)
+    );
+    return Promise.all([...associationPromises]);
   }
 
   function submitInstanceGroups(templateId, addedGroups = []) {
diff --git a/awx/ui_next/src/screens/Template/JobTemplateEdit/JobTemplateEdit.jsx b/awx/ui_next/src/screens/Template/JobTemplateEdit/JobTemplateEdit.jsx
index 2893dd82c5..73d90a8a26 100644
--- a/awx/ui_next/src/screens/Template/JobTemplateEdit/JobTemplateEdit.jsx
+++ b/awx/ui_next/src/screens/Template/JobTemplateEdit/JobTemplateEdit.jsx
@@ -127,19 +127,13 @@ class JobTemplateEdit extends Component {
     const disassociationPromises = removed.map(label =>
       JobTemplatesAPI.disassociateLabel(template.id, label)
     );
-    const associationPromises = added
-      .filter(label => !label.isNew)
-      .map(label => JobTemplatesAPI.associateLabel(template.id, label));
-    const creationPromises = added
-      .filter(label => label.isNew)
-      .map(label =>
-        JobTemplatesAPI.generateLabel(template.id, label, organizationId)
-      );
+    const associationPromises = added.map(label => {
+      return JobTemplatesAPI.associateLabel(template.id, label, organizationId);
+    });
 
     const results = await Promise.all([
       ...disassociationPromises,
       ...associationPromises,
-      ...creationPromises,
     ]);
     return results;
   }
diff --git a/awx/ui_next/src/screens/Template/JobTemplateEdit/JobTemplateEdit.test.jsx b/awx/ui_next/src/screens/Template/JobTemplateEdit/JobTemplateEdit.test.jsx
index 42fd375188..d00cc655a0 100644
--- a/awx/ui_next/src/screens/Template/JobTemplateEdit/JobTemplateEdit.test.jsx
+++ b/awx/ui_next/src/screens/Template/JobTemplateEdit/JobTemplateEdit.test.jsx
@@ -195,8 +195,8 @@ describe('<JobTemplateEdit />', () => {
       inventory: 1,
     };
     const labels = [
-      { id: 3, name: 'Foo', isNew: true },
-      { id: 4, name: 'Bar', isNew: true },
+      { id: 3, name: 'Foo' },
+      { id: 4, name: 'Bar' },
       { id: 5, name: 'Maple' },
       { id: 6, name: 'Tree' },
     ];
@@ -230,8 +230,7 @@ describe('<JobTemplateEdit />', () => {
     delete expected.type;
     expect(JobTemplatesAPI.update).toHaveBeenCalledWith(1, expected);
     expect(JobTemplatesAPI.disassociateLabel).toHaveBeenCalledTimes(2);
-    expect(JobTemplatesAPI.associateLabel).toHaveBeenCalledTimes(2);
-    expect(JobTemplatesAPI.generateLabel).toHaveBeenCalledTimes(2);
+    expect(JobTemplatesAPI.associateLabel).toHaveBeenCalledTimes(4);
   });
 
   test('should navigate to job template detail when cancel is clicked', async () => {
diff --git a/awx/ui_next/src/screens/Template/shared/LabelSelect.jsx b/awx/ui_next/src/screens/Template/shared/LabelSelect.jsx
index 174116c9e6..2ffcc4b6c6 100644
--- a/awx/ui_next/src/screens/Template/shared/LabelSelect.jsx
+++ b/awx/ui_next/src/screens/Template/shared/LabelSelect.jsx
@@ -57,13 +57,26 @@ function LabelSelect({ value, placeholder, onChange, onError }) {
     <Select
       variant={SelectVariant.typeaheadMulti}
       onToggle={toggleExpanded}
-      onSelect={onSelect}
+      onSelect={(e, item) => {
+        if (typeof item === 'string') {
+          item = { id: item, name: item };
+        }
+        onSelect(e, item);
+      }}
       onClear={() => onChange([])}
       onFilter={event => {
         const str = event.target.value.toLowerCase();
         const matches = options.filter(o => o.name.toLowerCase().includes(str));
         return renderOptions(matches);
       }}
+      isCreatable
+      onCreateOption={label => {
+        label = label.trim();
+        if (!options.includes(label)) {
+          setOptions(options.concat({ name: label, id: label }));
+        }
+        return label;
+      }}
       selections={selections}
       isExpanded={isExpanded}
       ariaLabelledBy="label-select"
diff --git a/awx/ui_next/src/screens/Template/shared/LabelSelect.test.jsx b/awx/ui_next/src/screens/Template/shared/LabelSelect.test.jsx
index 88a76ae570..dda07d8e99 100644
--- a/awx/ui_next/src/screens/Template/shared/LabelSelect.test.jsx
+++ b/awx/ui_next/src/screens/Template/shared/LabelSelect.test.jsx
@@ -56,4 +56,20 @@ describe('<LabelSelect />', () => {
     const selectOptions = wrapper.find('SelectOption');
     expect(selectOptions).toHaveLength(4);
   });
+  test('Generate a label  ', async () => {
+    let wrapper;
+    const onChange = jest.fn();
+    LabelsAPI.read.mockReturnValueOnce({
+      data: {
+        options,
+      },
+    });
+    await act(async () => {
+      wrapper = mount(
+        <LabelSelect value={[]} onError={() => {}} onChange={onChange} />
+      );
+    });
+    await wrapper.find('Select').invoke('onSelect')({}, 'foo');
+    expect(onChange).toBeCalledWith([{ id: 'foo', name: 'foo' }]);
+  });
 });