diff --git a/.changeset/five-readers-teach.md b/.changeset/five-readers-teach.md
new file mode 100644
index 00000000..37886f44
--- /dev/null
+++ b/.changeset/five-readers-teach.md
@@ -0,0 +1,5 @@
+---
+'@vue-flow/core': patch
+---
+
+Teleport edge labels into separate svg container (fixes edges overlapping edge labels)
diff --git a/packages/core/src/components/Edges/EdgeLabelRenderer.vue b/packages/core/src/components/Edges/EdgeLabelRenderer.vue
new file mode 100644
index 00000000..3de7b419
--- /dev/null
+++ b/packages/core/src/components/Edges/EdgeLabelRenderer.vue
@@ -0,0 +1,23 @@
+<script lang="ts" setup>
+import { useVueFlow } from '../../composables'
+
+const { viewportRef } = useVueFlow()
+
+const teleportTarget = $computed(() => viewportRef.value?.getElementsByClassName('vue-flow__edge-labels')[0])
+</script>
+
+<script lang="ts">
+export default {
+  name: 'EdgeLabelRenderer',
+}
+</script>
+
+<template>
+  <svg>
+    <foreignObject height="0" width="0">
+      <Teleport :to="teleportTarget" :disabled="!teleportTarget">
+        <slot />
+      </Teleport>
+    </foreignObject>
+  </svg>
+</template>
diff --git a/packages/core/src/components/Edges/EdgeText.vue b/packages/core/src/components/Edges/EdgeText.vue
index 752847b6..89c449b2 100644
--- a/packages/core/src/components/Edges/EdgeText.vue
+++ b/packages/core/src/components/Edges/EdgeText.vue
@@ -1,4 +1,5 @@
 <script lang="ts" setup>
+import { isString } from '@vueuse/core'
 import type { EdgeTextProps } from '../../types/components'
 import type { Rect as RectType } from '../../types'
 
@@ -55,10 +56,8 @@ export default {
     />
     <text v-bind="$attrs" ref="el" class="vue-flow__edge-text" :y="box.height / 2" dy="0.3em" :style="labelStyle">
       <slot>
-        <component :is="label" v-if="typeof label !== 'string' && typeof label" />
-        <template v-else>
-          {{ label }}
-        </template>
+        <component :is="label" v-if="!isString(label)" />
+        <template v-else> {{ label }} </template>
       </slot>
     </text>
   </g>
diff --git a/packages/core/src/components/Edges/index.ts b/packages/core/src/components/Edges/index.ts
index 562d702b..e0933537 100644
--- a/packages/core/src/components/Edges/index.ts
+++ b/packages/core/src/components/Edges/index.ts
@@ -7,3 +7,4 @@ export { default as StraightEdge } from './StraightEdge'
 export { default as EdgeAnchor } from './EdgeAnchor'
 export { default as EdgeText } from './EdgeText.vue'
 export { default as EdgeWrapper } from './Wrapper'
+export { default as EdgeLabelRenderer } from './EdgeLabelRenderer.vue'
diff --git a/packages/core/src/container/EdgeRenderer/EdgeRenderer.vue b/packages/core/src/container/EdgeRenderer/EdgeRenderer.vue
index 247acfc0..2c035e49 100644
--- a/packages/core/src/container/EdgeRenderer/EdgeRenderer.vue
+++ b/packages/core/src/container/EdgeRenderer/EdgeRenderer.vue
@@ -127,24 +127,27 @@ export default {
 </script>
 
 <template>
-  <svg v-for="group of groups" :key="group.level" class="vue-flow__edges vue-flow__container" :style="`z-index: ${group.level}`">
-    <MarkerDefinitions v-if="group.isMaxLevel" />
-    <g>
-      <EdgeWrapper
-        v-for="edge of group.edges"
-        :id="edge.id"
-        :key="edge.id"
-        :edge="edge"
-        :type="getType(edge.type, edge.template)"
-        :name="edge.type || 'default'"
-        :source-node="getNode(edge.source)"
-        :target-node="getNode(edge.target)"
-        :selectable="selectable(edge.selectable)"
-        :updatable="updatable(edge.updatable)"
-        :class="getClass(edge)"
-      />
-    </g>
-  </svg>
+  <template v-for="group of groups" :key="group.level">
+    <svg class="vue-flow__edges vue-flow__container" :style="`z-index: ${group.level}`">
+      <MarkerDefinitions v-if="group.isMaxLevel" />
+      <g>
+        <EdgeWrapper
+          v-for="edge of group.edges"
+          :id="edge.id"
+          :key="edge.id"
+          :edge="edge"
+          :type="getType(edge.type, edge.template)"
+          :name="edge.type || 'default'"
+          :source-node="getNode(edge.source)"
+          :target-node="getNode(edge.target)"
+          :selectable="selectable(edge.selectable)"
+          :updatable="updatable(edge.updatable)"
+          :class="getClass(edge)"
+        />
+      </g>
+    </svg>
+  </template>
+
   <svg v-if="connectionLineVisible && !!sourceNode" class="vue-flow__edges vue-flow__connectionline vue-flow__container">
     <ConnectionLine :source-node="sourceNode" />
   </svg>
diff --git a/packages/core/src/container/Viewport/Transform.vue b/packages/core/src/container/Viewport/Transform.vue
index f45fd026..666aba73 100644
--- a/packages/core/src/container/Viewport/Transform.vue
+++ b/packages/core/src/container/Viewport/Transform.vue
@@ -53,6 +53,9 @@ export default {
     :style="{ transform: `translate(${viewport.x}px,${viewport.y}px) scale(${viewport.zoom})`, opacity: ready ? undefined : 0 }"
   >
     <EdgeRenderer />
+
+    <div class="vue-flow__edge-labels" />
+
     <NodeRenderer />
     <slot />
   </div>
diff --git a/packages/core/src/index.ts b/packages/core/src/index.ts
index 3bfbe49e..642d319b 100644
--- a/packages/core/src/index.ts
+++ b/packages/core/src/index.ts
@@ -7,7 +7,16 @@ export { default as VueFlow } from './container/VueFlow/VueFlow.vue'
 
 export { default as Handle } from './components/Handle/Handle.vue'
 
-export { StraightEdge, StepEdge, BezierEdge, SimpleBezierEdge, SmoothStepEdge, BaseEdge, EdgeText } from './components/Edges'
+export {
+  StraightEdge,
+  StepEdge,
+  BezierEdge,
+  SimpleBezierEdge,
+  SmoothStepEdge,
+  BaseEdge,
+  EdgeText,
+  EdgeLabelRenderer,
+} from './components/Edges'
 
 export { getBezierPath, getSimpleBezierPath, getSmoothStepPath, getStraightPath } from './components/Edges/utils'
 
diff --git a/packages/core/src/style.css b/packages/core/src/style.css
index e2bc3104..eed0db88 100644
--- a/packages/core/src/style.css
+++ b/packages/core/src/style.css
@@ -39,6 +39,13 @@
   z-index: 5;
 }
 
+.vue-flow__edge-labels {
+  position: absolute;
+  width: 100%;
+  height: 100%;
+  pointer-events: none;
+}
+
 .vue-flow__nodesselection-rect:focus,
 .vue-flow__nodesselection-rect:focus-visible {
   outline: none;
diff --git a/packages/core/src/utils/graph.ts b/packages/core/src/utils/graph.ts
index 6ecca9a8..25a49cdd 100644
--- a/packages/core/src/utils/graph.ts
+++ b/packages/core/src/utils/graph.ts
@@ -106,7 +106,7 @@ export const parseEdge = (edge: Edge, defaults?: Partial<GraphEdge>): GraphEdge
         selectable: edge.selectable,
         data: shallowReactive(edge.data || {}),
         events: shallowReactive(edge.events || {}),
-        label: edge.label && !isString(edge.label) ? markRaw(edge.label) : undefined,
+        label: edge.label && !isString(edge.label) ? markRaw(edge.label) : edge.label,
         ...defaults,
       } as GraphEdge)
     : defaults
diff --git a/packages/vue-flow/src/style.css b/packages/vue-flow/src/style.css
index d8ed7a7c..4125a3ee 100644
--- a/packages/vue-flow/src/style.css
+++ b/packages/vue-flow/src/style.css
@@ -17,9 +17,9 @@
   z-index: 1;
   cursor: grab;
 
-  &.dragging {
-     cursor: grabbing;
-   }
+&.dragging {
+   cursor: grabbing;
+ }
 }
 
 .vue-flow__transformationpane {
@@ -36,6 +36,13 @@
   z-index: 5;
 }
 
+.vue-flow__edge-labels {
+  position: absolute;
+  width: 100%;
+  height: 100%;
+  pointer-events: none;
+}
+
 .vue-flow__nodesselection-rect:focus,
 .vue-flow__nodesselection-rect:focus-visible {
   outline: none;
@@ -57,48 +64,48 @@
   pointer-events: visibleStroke;
   cursor: pointer;
 
-  &.animated path {
-     stroke-dasharray: 5;
-     animation: dashdraw 0.5s linear infinite;
-   }
+&.animated path {
+   stroke-dasharray: 5;
+   animation: dashdraw 0.5s linear infinite;
+ }
 
-  &.inactive {
-     pointer-events: none;
-   }
+&.inactive {
+   pointer-events: none;
+ }
 
-  &.selected,
-  &:focus,
-  &:focus-visible {
-     outline: none;
-   }
+&.selected,
+&:focus,
+&:focus-visible {
+   outline: none;
+ }
 
-  &.selected .vue-flow__edge-path,
-  &:focus .vue-flow__edge-path,
-  &:focus-visible .vue-flow__edge-path {
-     stroke: #555;
-   }
+&.selected .vue-flow__edge-path,
+&:focus .vue-flow__edge-path,
+&:focus-visible .vue-flow__edge-path {
+   stroke: #555;
+ }
 
-  &-textwrapper {
-     pointer-events: all;
-   }
+&-textwrapper {
+   pointer-events: all;
+ }
 
-  &-textbg {
-     fill: white;
-   }
+&-textbg {
+   fill: white;
+ }
 
-  .vue-flow__edge-text {
-    pointer-events: none;
-    user-select: none;
-  }
+&-text {
+   pointer-events: none;
+   user-select: none;
+ }
 }
 
 .vue-flow__connection {
   pointer-events: none;
 
-  &.animated {
-     stroke-dasharray: 5;
-     animation: dashdraw 0.5s linear infinite;
-   }
+&.animated {
+   stroke-dasharray: 5;
+   animation: dashdraw 0.5s linear infinite;
+ }
 }
 
 .vue-flow__connectionline {
@@ -118,9 +125,9 @@
   box-sizing: border-box;
   cursor: grab;
 
-  &.dragging {
-     cursor: grabbing;
-   }
+&.dragging {
+   cursor: grabbing;
+ }
 }
 
 .vue-flow__nodesselection {
@@ -128,11 +135,15 @@
   transform-origin: left top;
   pointer-events: none;
 
-  &-rect {
-     position: absolute;
-     pointer-events: all;
-     cursor: grab;
-   }
+&-rect {
+   position: absolute;
+   pointer-events: all;
+   cursor: grab;
+
+&.dragging {
+   cursor: grabbing;
+ }
+}
 }
 
 .vue-flow__handle {
@@ -141,35 +152,35 @@
   min-width: 5px;
   min-height: 5px;
 
-  &.connectable {
-     pointer-events: all;
-     cursor: crosshair;
-   }
+&.connectable {
+   pointer-events: all;
+   cursor: crosshair;
+ }
 
-  &-bottom {
-     top: auto;
-     left: 50%;
-     bottom: -4px;
-     transform: translate(-50%, 0);
-   }
+&-bottom {
+   top: auto;
+   left: 50%;
+   bottom: -4px;
+   transform: translate(-50%, 0);
+ }
 
-  &-top {
-     left: 50%;
-     top: -4px;
-     transform: translate(-50%, 0);
-   }
+&-top {
+   left: 50%;
+   top: -4px;
+   transform: translate(-50%, 0);
+ }
 
-  &-left {
-     top: 50%;
-     left: -4px;
-     transform: translate(0, -50%);
-   }
+&-left {
+   top: 50%;
+   left: -4px;
+   transform: translate(0, -50%);
+ }
 
-  &-right {
-     right: -4px;
-     top: 50%;
-     transform: translate(0, -50%);
-   }
+&-right {
+   right: -4px;
+   top: 50%;
+   transform: translate(0, -50%);
+ }
 }
 
 .vue-flow__edgeupdater {
@@ -182,26 +193,26 @@
   z-index: 5;
   margin: 15px;
 
-  &.top {
-     top: 0;
-   }
+&.top {
+   top: 0;
+ }
 
-  &.bottom {
-     bottom: 0;
-   }
+&.bottom {
+   bottom: 0;
+ }
 
-  &.left {
-     left: 0;
-   }
+&.left {
+   left: 0;
+ }
 
-  &.right {
-     right: 0;
-   }
+&.right {
+   right: 0;
+ }
 
-  &.center {
-     left: 50%;
-     transform: translateX(-50%);
-   }
+&.center {
+   left: 50%;
+   transform: translateX(-50%);
+ }
 }
 
 @keyframes dashdraw {