Abstract: An apparatus and method for applying labels to products of various sizes employs a printer and applicator head using air as a propellant. Control circuitry responsive to sensors located on the apparatus position the labels on the applicator head and trigger the ejection of a label onto a target surface. Labels to be printed are continuously supplied to the printer and applicator head from a label supply strip wound on a label feed reel mounted on the apparatus. The portion of the label liner extending between the feed reel and take-up reel is provided with a detector which can detect a lag in liner tension and activate the take-up reel to restore tension each time a lag condition is detected.