diff --git a/app/assets/javascripts/create_label.js.es6 b/app/assets/javascripts/create_label.js.es6
index 947c129d5b5..85384d98126 100644
--- a/app/assets/javascripts/create_label.js.es6
+++ b/app/assets/javascripts/create_label.js.es6
@@ -107,9 +107,9 @@
           if (typeof label.message === 'string') {
             errors = label.message;
           } else {
-            errors = label.message.map(function (value, key) {
-              return key + " " + value[0];
-            }).join("<br/>");
+            errors = Object.keys(label.message).map(key =>
+              `${gl.text.humanize(key)} ${label.message[key].join(', ')}`
+            ).join("<br/>");
           }
 
           this.$newLabelError
diff --git a/changelogs/unreleased/27287-label-dropdown-error-messages.yml b/changelogs/unreleased/27287-label-dropdown-error-messages.yml
new file mode 100644
index 00000000000..dfd4102c324
--- /dev/null
+++ b/changelogs/unreleased/27287-label-dropdown-error-messages.yml
@@ -0,0 +1,4 @@
+---
+title: Fix displaying error messages for create label dropdown
+merge_request: 9058
+author: Tom Koole
diff --git a/spec/features/issues/issue_sidebar_spec.rb b/spec/features/issues/issue_sidebar_spec.rb
index 1eb981942ea..7b9d4534ada 100644
--- a/spec/features/issues/issue_sidebar_spec.rb
+++ b/spec/features/issues/issue_sidebar_spec.rb
@@ -7,9 +7,9 @@ feature 'Issue Sidebar', feature: true do
   let(:project) { create(:project, :public) }
   let(:issue) { create(:issue, project: project) }
   let!(:user) { create(:user)}
+  let!(:label) { create(:label, project: project, title: 'bug') }
 
   before do
-    create(:label, project: project, title: 'bug')
     login_as(user)
   end
 
@@ -50,16 +50,6 @@ feature 'Issue Sidebar', feature: true do
       visit_issue(project, issue)
     end
 
-    describe 'when clicking on edit labels', js: true do
-      it 'shows dropdown option to create a new label' do
-        find('.block.labels .edit-link').click
-
-        page.within('.block.labels') do
-          expect(page).to have_content 'Create new'
-        end
-      end
-    end
-
     context 'sidebar', js: true do
       it 'changes size when the screen size is smaller' do
         sidebar_selector = 'aside.right-sidebar.right-sidebar-collapsed'
@@ -77,36 +67,53 @@ feature 'Issue Sidebar', feature: true do
       end
     end
 
-    context 'creating a new label', js: true do
-      it 'shows option to crate a new label is present' do
+    context 'editing issue labels', js: true do
+      before do
         page.within('.block.labels') do
           find('.edit-link').click
+        end
+      end
 
+      it 'shows option to create a new label' do
+        page.within('.block.labels') do
           expect(page).to have_content 'Create new'
         end
       end
 
-      it 'shows dropdown switches to "create label" section' do
-        page.within('.block.labels') do
-          find('.edit-link').click
-          click_link 'Create new'
-
-          expect(page).to have_content 'Create new label'
+      context 'creating a new label', js: true do
+        before do
+          page.within('.block.labels') do
+            click_link 'Create new'
+          end
         end
-      end
 
-      it 'adds new label' do
-        page.within('.block.labels') do
-          find('.edit-link').click
-          sleep 1
-          click_link 'Create new'
+        it 'shows dropdown switches to "create label" section' do
+          page.within('.block.labels') do
+            expect(page).to have_content 'Create new label'
+          end
+        end
 
-          fill_in 'new_label_name', with: 'wontfix'
-          page.find(".suggest-colors a", match: :first).click
-          click_button 'Create'
+        it 'adds new label' do
+          page.within('.block.labels') do
+            fill_in 'new_label_name', with: 'wontfix'
+            page.find(".suggest-colors a", match: :first).click
+            click_button 'Create'
 
-          page.within('.dropdown-page-one') do
-            expect(page).to have_content 'wontfix'
+            page.within('.dropdown-page-one') do
+              expect(page).to have_content 'wontfix'
+            end
+          end
+        end
+
+        it 'shows error message if label title is taken' do
+          page.within('.block.labels') do
+            fill_in 'new_label_name', with: label.title
+            page.find('.suggest-colors a', match: :first).click
+            click_button 'Create'
+
+            page.within('.dropdown-page-two') do
+              expect(page).to have_content 'Title has already been taken'
+            end
           end
         end
       end