diff --git a/lib/features/label-editing/cmd/UpdateLabelHandler.js b/lib/features/label-editing/cmd/UpdateLabelHandler.js
index 8dfbb851..35159c2a 100644
--- a/lib/features/label-editing/cmd/UpdateLabelHandler.js
+++ b/lib/features/label-editing/cmd/UpdateLabelHandler.js
@@ -11,6 +11,7 @@ import {
 } from '../../../util/LabelUtil';
 
 import {
+  getDi,
   is
 } from '../../../util/ModelUtil';
 
@@ -23,7 +24,30 @@ var NULL_DIMENSIONS = {
 /**
  * A handler that updates the text of a BPMN element.
  */
-export default function UpdateLabelHandler(modeling, textRenderer) {
+export default function UpdateLabelHandler(modeling, textRenderer, bpmnFactory) {
+
+  /**
+   * Creates an empty `diLabel` attribute for embedded labels.
+   *
+   * @param {djs.model.Base} element
+   * @param {string} text
+   */
+  function ensureInternalLabelDi(element, text) {
+    if (isLabelExternal(element)) {
+      return;
+    }
+
+    var di = getDi(element);
+
+    if (text && !di.label) {
+      di.label = bpmnFactory.create('bpmndi:BPMNLabel');
+    }
+
+    if (!text && di.label) {
+      di.label = null;
+    }
+  }
+
 
   /**
    * Set the label and return the changed elements.
@@ -42,6 +66,8 @@ export default function UpdateLabelHandler(modeling, textRenderer) {
 
     setLabel(label, text, labelTarget !== label);
 
+    ensureInternalLabelDi(element, text);
+
     return [ label, labelTarget ];
   }
 
@@ -127,7 +153,8 @@ export default function UpdateLabelHandler(modeling, textRenderer) {
 
 UpdateLabelHandler.$inject = [
   'modeling',
-  'textRenderer'
+  'textRenderer',
+  'bpmnFactory'
 ];
 
 
diff --git a/test/spec/features/modeling/UpdateLabel.bpmn b/test/spec/features/modeling/UpdateLabel.bpmn
index fadc448a..b869e231 100644
--- a/test/spec/features/modeling/UpdateLabel.bpmn
+++ b/test/spec/features/modeling/UpdateLabel.bpmn
@@ -1,9 +1,10 @@
 <?xml version="1.0" encoding="UTF-8"?>
-<bpmn:definitions xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:bpmn="http://www.omg.org/spec/BPMN/20100524/MODEL" xmlns:bpmndi="http://www.omg.org/spec/BPMN/20100524/DI" xmlns:dc="http://www.omg.org/spec/DD/20100524/DC" id="Definitions_1" targetNamespace="http://bpmn.io/schema/bpmn">
+<bpmn:definitions xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:bpmn="http://www.omg.org/spec/BPMN/20100524/MODEL" xmlns:bpmndi="http://www.omg.org/spec/BPMN/20100524/DI" xmlns:dc="http://www.omg.org/spec/DD/20100524/DC" id="Definitions_1" targetNamespace="http://bpmn.io/schema/bpmn" exporter="Camunda Modeler" exporterVersion="4.10.0">
   <bpmn:process id="Process_1" isExecutable="false">
     <bpmn:startEvent id="StartEvent_1" name="Foo" />
     <bpmn:startEvent id="StartEvent_2" />
     <bpmn:task id="Task_1" />
+    <bpmn:task id="Task_2" name="Task 2" />
     <bpmn:textAnnotation id="TextAnnotation_1">
       <bpmn:text></bpmn:text>
     </bpmn:textAnnotation>
@@ -29,6 +30,10 @@
       <bpmndi:BPMNShape id="TextAnnotation_1_di" bpmnElement="TextAnnotation_1">
         <dc:Bounds x="426" y="220" width="100" height="30" />
       </bpmndi:BPMNShape>
+      <bpmndi:BPMNShape id="Activity_0rxkqbk_di" bpmnElement="Task_2">
+        <dc:Bounds x="460" y="80" width="100" height="80" />
+        <bpmndi:BPMNLabel />
+      </bpmndi:BPMNShape>
       <bpmndi:BPMNShape id="Group_1_di" bpmnElement="Group_1">
         <dc:Bounds x="165" y="190" width="150" height="120" />
       </bpmndi:BPMNShape>
diff --git a/test/spec/features/modeling/UpdateLabelSpec.js b/test/spec/features/modeling/UpdateLabelSpec.js
index 201e8c19..7bbac540 100644
--- a/test/spec/features/modeling/UpdateLabelSpec.js
+++ b/test/spec/features/modeling/UpdateLabelSpec.js
@@ -131,20 +131,6 @@ describe('features/modeling - update label', function() {
   ));
 
 
-  it('should change name of task', inject(function(modeling, elementRegistry) {
-
-    // given
-    var task_1 = elementRegistry.get('Task_1');
-
-    // when
-    modeling.updateLabel(task_1, 'foo');
-
-    // then
-    expect(task_1.businessObject.name).to.equal('foo');
-    expect(task_1.label).to.be.undefined;
-  }));
-
-
   it('should change text annotation text and bounds', inject(
     function(modeling, elementRegistry) {
 
@@ -234,4 +220,36 @@ describe('features/modeling - update label', function() {
     expect(element).to.have.bounds(newBounds);
   }));
 
+
+  describe('embedded labels', function() {
+
+    it('should change name of task', inject(function(modeling, elementRegistry) {
+
+      // given
+      var task_1 = elementRegistry.get('Task_1');
+
+      // when
+      modeling.updateLabel(task_1, 'foo');
+
+      // then
+      expect(task_1.businessObject.name).to.equal('foo');
+      expect(task_1.di.label).to.exist;
+    }));
+
+
+    it('should delete label of task', inject(function(modeling, elementRegistry) {
+
+      // given
+      var task_2 = elementRegistry.get('Task_2');
+
+      // when
+      modeling.updateLabel(task_2, '');
+
+      // then
+      expect(task_2.businessObject.name).to.equal('');
+      expect(task_2.di.label).not.to.exist;
+    }));
+
+  });
+
 });
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