diff --git a/compose/material3/material3/src/commonMain/kotlin/androidx/compose/material3/Label.kt b/compose/material3/material3/src/commonMain/kotlin/androidx/compose/material3/Label.kt
index 894daf46f61c9..144ed3c7150ed 100644
--- a/compose/material3/material3/src/commonMain/kotlin/androidx/compose/material3/Label.kt
+++ b/compose/material3/material3/src/commonMain/kotlin/androidx/compose/material3/Label.kt
@@ -31,13 +31,13 @@ import androidx.compose.runtime.Composable
 import androidx.compose.runtime.LaunchedEffect
 import androidx.compose.runtime.MutableState
 import androidx.compose.runtime.getValue
+import androidx.compose.runtime.mutableStateListOf
 import androidx.compose.runtime.mutableStateOf
 import androidx.compose.runtime.remember
 import androidx.compose.runtime.setValue
 import androidx.compose.ui.Modifier
 import androidx.compose.ui.layout.LayoutCoordinates
 import androidx.compose.ui.layout.onGloballyPositioned
-import kotlinx.coroutines.flow.collectLatest
 
 /**
  * Label component that will append a [label] to [content]. The positioning logic uses
@@ -108,22 +108,35 @@ private fun HandleInteractions(
     interactionSource: MutableInteractionSource,
 ) {
     if (enabled) {
+        // Track all active interactions so that HoverInteraction.Exit during a drag does not
+        // prematurely dismiss the label. With collectLatest the previous show() coroutine was
+        // cancelled on every new interaction; if HoverInteraction.Exit arrived while a
+        // DragInteraction.Start was still active the label disappeared until drag ended.
+        val activeInteractions = remember { mutableStateListOf<Interaction>() }
+        val hasActiveInteractions = activeInteractions.isNotEmpty()
+
         LaunchedEffect(interactionSource) {
-            interactionSource.interactions.collectLatest { interaction ->
+            interactionSource.interactions.collect { interaction ->
                 when (interaction) {
-                    is PressInteraction.Press,
-                    is DragInteraction.Start,
-                    is HoverInteraction.Enter -> {
-                        state.show(MutatePriority.UserInput)
-                    }
-                    is PressInteraction.Release,
-                    is DragInteraction.Stop,
-                    is HoverInteraction.Exit -> {
-                        state.dismiss()
-                    }
+                    is PressInteraction.Press -> activeInteractions.add(interaction)
+                    is PressInteraction.Release -> activeInteractions.remove(interaction.press)
+                    is PressInteraction.Cancel -> activeInteractions.remove(interaction.press)
+                    is DragInteraction.Start -> activeInteractions.add(interaction)
+                    is DragInteraction.Stop -> activeInteractions.remove(interaction.start)
+                    is DragInteraction.Cancel -> activeInteractions.remove(interaction.start)
+                    is HoverInteraction.Enter -> activeInteractions.add(interaction)
+                    is HoverInteraction.Exit -> activeInteractions.remove(interaction.enter)
                 }
             }
         }
+
+        LaunchedEffect(hasActiveInteractions) {
+            if (hasActiveInteractions) {
+                state.show(MutatePriority.UserInput)
+            } else {
+                state.dismiss()
+            }
+        }
     }
 }
 
diff --git a/compose/material3/material3/src/skikoTest/kotlin/androidx/compose/material3/LabelTest.kt b/compose/material3/material3/src/skikoTest/kotlin/androidx/compose/material3/LabelTest.kt
new file mode 100644
index 0000000000000..c13a642a9e6a8
--- /dev/null
+++ b/compose/material3/material3/src/skikoTest/kotlin/androidx/compose/material3/LabelTest.kt
@@ -0,0 +1,77 @@
+/*
+ * Copyright 2025 The Android Open Source Project
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package androidx.compose.material3
+
+import androidx.compose.foundation.interaction.DragInteraction
+import androidx.compose.foundation.interaction.HoverInteraction
+import androidx.compose.foundation.interaction.MutableInteractionSource
+import androidx.compose.foundation.interaction.PressInteraction
+import androidx.compose.foundation.layout.Box
+import androidx.compose.foundation.layout.size
+import androidx.compose.runtime.rememberCoroutineScope
+import androidx.compose.ui.Modifier
+import androidx.compose.ui.geometry.Offset
+import androidx.compose.ui.platform.testTag
+import androidx.compose.ui.test.ExperimentalTestApi
+import androidx.compose.ui.test.assertIsDisplayed
+import androidx.compose.ui.test.onNodeWithTag
+import androidx.compose.ui.test.runComposeUiTest
+import androidx.compose.ui.unit.dp
+import kotlin.test.Test
+import kotlinx.coroutines.CoroutineScope
+import kotlinx.coroutines.launch
+
+@OptIn(ExperimentalTestApi::class, ExperimentalMaterial3Api::class)
+class LabelTest {
+
+    // Regression test for https://youtrack.jetbrains.com/issue/CMP-8708
+    // When a Slider is dragged by its thumb, the thumb's hoverable emits a HoverInteraction.Exit
+    // as the pointer leaves the thumb bounds *while the drag is still in progress*. The label must
+    // stay visible as long as a press or drag interaction is still active, instead of being
+    // dismissed by that mid-drag hover exit.
+    @Test
+    fun label_staysVisible_whenHoverExitsWhileStillPressedOrDragging() = runComposeUiTest {
+        val interactionSource = MutableInteractionSource()
+        lateinit var scope: CoroutineScope
+        setContent {
+            scope = rememberCoroutineScope()
+            Label(
+                label = { Text(text = "label", modifier = Modifier.testTag("label")) },
+                interactionSource = interactionSource,
+            ) {
+                Box(Modifier.size(48.dp).testTag("anchor"))
+            }
+        }
+
+        // The label is hidden until the anchor is interacted with.
+        onNodeWithTag("label").assertDoesNotExist()
+
+        // Emit the exact interaction sequence produced when dragging a Slider thumb: hover the
+        // thumb, press, start dragging, then exit the hover while the drag is ongoing.
+        val hoverEnter = HoverInteraction.Enter()
+        scope.launch {
+            interactionSource.emit(hoverEnter)
+            interactionSource.emit(PressInteraction.Press(Offset.Zero))
+            interactionSource.emit(DragInteraction.Start())
+            interactionSource.emit(HoverInteraction.Exit(hoverEnter))
+        }
+        waitForIdle()
+
+        // A press and a drag are still active, so the label must remain visible.
+        onNodeWithTag("label").assertIsDisplayed()
+    }
+}