diff --git a/R/FilterStateChoices.R b/R/FilterStateChoices.R
index 450414fb5..ab710e413 100644
--- a/R/FilterStateChoices.R
+++ b/R/FilterStateChoices.R
@@ -1,5 +1,27 @@
 # ChoicesFilterState ------
 
+#' Drop unused factor levels while preserving label attribute
+#'
+#' @description
+#' Helper function to drop unused levels from a factor variable while preserving
+#' the `label` attribute. The base R `droplevels()` function strips all attributes
+#' except `levels` and `class`, which causes the loss of variable labels that are
+#' commonly used in clinical trial datasets.
+#'
+#' @param x (`factor`) A factor variable, potentially with a `label` attribute.
+#'
+#' @return The input factor with unused levels dropped and the `label` attribute preserved.
+#'
+#' @keywords internal
+.drop_levels_keep_label <- function(x) {
+  label_attr <- attr(x, "label", exact = TRUE)
+  x <- droplevels(x)
+  if (!is.null(label_attr)) {
+    attr(x, "label") <- label_attr
+  }
+  x
+}
+
 #' @name ChoicesFilterState
 #' @docType class
 #'
@@ -158,7 +180,7 @@ ChoicesFilterState <- R6::R6Class( # nolint
           combine = "or"
         )
         if (is.factor(x)) {
-          x <- droplevels(x)
+          x <- .drop_levels_keep_label(x)
         }
         super$initialize(
           x = x,
diff --git a/man/dot-drop_levels_keep_label.Rd b/man/dot-drop_levels_keep_label.Rd
new file mode 100644
index 000000000..80cbc55f2
--- /dev/null
+++ b/man/dot-drop_levels_keep_label.Rd
@@ -0,0 +1,21 @@
+% Generated by roxygen2: do not edit by hand
+% Please edit documentation in R/FilterStateChoices.R
+\name{.drop_levels_keep_label}
+\alias{.drop_levels_keep_label}
+\title{Drop unused factor levels while preserving label attribute}
+\usage{
+.drop_levels_keep_label(x)
+}
+\arguments{
+\item{x}{(\code{factor}) A factor variable, potentially with a \code{label} attribute.}
+}
+\value{
+The input factor with unused levels dropped and the \code{label} attribute preserved.
+}
+\description{
+Helper function to drop unused levels from a factor variable while preserving
+the \code{label} attribute. The base R \code{droplevels()} function strips all attributes
+except \code{levels} and \code{class}, which causes the loss of variable labels that are
+commonly used in clinical trial datasets.
+}
+\keyword{internal}
diff --git a/tests/testthat/test-ChoicesFilterState.R b/tests/testthat/test-ChoicesFilterState.R
index 119231a82..65310416a 100644
--- a/tests/testthat/test-ChoicesFilterState.R
+++ b/tests/testthat/test-ChoicesFilterState.R
@@ -706,3 +706,91 @@ testthat::test_that("get_call works for various combinations", {
     quote(!x %in% c("a", "b", "c", "d", "e", "f", "g", "h"))
   )
 })
+
+testthat::test_that("Factor with label attribute displays label in UI", {
+  factor_with_label <- factor(c("a", "b", "c", "a", "b"))
+  varlabel <- "Category Label"
+  varname <- "category"
+  attr(factor_with_label, "label") <- varlabel
+  filter_state <- init_filter_state(
+    factor_with_label,
+    slice = teal_slice(
+      dataname = "data",
+      varname = varname
+    )
+  )
+  ui_character <- as.character(filter_state$ui(id = "test"))
+
+  testthat::expect_true(grepl(varlabel, ui_character))
+})
+
+testthat::test_that("Factor without label attribute has empty varlabel in UI", {
+  factor_without_label <- factor(c("a", "b", "c", "a", "b"))
+  varlabel <- "Category Label"
+  varname <- "category"
+  filter_state <- init_filter_state(
+    factor_without_label,
+    slice = teal_slice(
+      dataname = "data",
+      varname = varname
+    )
+  )
+  ui_character <- as.character(filter_state$ui(id = "test"))
+
+  testthat::expect_true(grepl("teal-slice filter-card-varlabel", ui_character)) # class is here
+  testthat::expect_false(grepl(varlabel, ui_character)) # with empty varlabel
+})
+
+testthat::test_that("Character variable with label attribute displays label in UI", {
+  char_with_label <- c("a", "b", "c", "a", "b")
+  varlabel <- "Character Label"
+  varname <- "my_character"
+  attr(char_with_label, "label") <- varlabel
+
+  filter_state <- init_filter_state(
+    char_with_label,
+    slice = teal_slice(
+      dataname = "data",
+      varname = varname
+    )
+  )
+  ui_character <- as.character(filter_state$ui(id = "test"))
+
+  testthat::expect_true(grepl(varlabel, ui_character))
+})
+
+testthat::test_that("Factor with same label as varname has empty varlabel in UI", {
+  factor_same_label <- factor(c("a", "b", "c", "a", "b"))
+  varname <- "category"
+  varlabel <- varname
+  attr(factor_same_label, "label") <- varlabel
+  filter_state <- init_filter_state(
+    factor_same_label,
+    slice = teal_slice(
+      dataname = "data",
+      varname = varname
+    )
+  )
+  ui_character <- as.character(filter_state$ui(id = "test"))
+
+  # class with empty varlabel
+  testthat::expect_true(grepl('class="teal-slice filter-card-varlabel"></div>', ui_character))
+})
+
+testthat::test_that("Numeric variable with label attribute displays label in UI", {
+  numeric_with_label <- c(1, 2, 3, 2, 1)
+  varlabel <- "Numeric Label"
+  varname <- "my_number"
+  attr(numeric_with_label, "label") <- varlabel
+
+  filter_state <- init_filter_state(
+    numeric_with_label,
+    slice = teal_slice(
+      dataname = "data",
+      varname = varname
+    )
+  )
+  ui_character <- as.character(filter_state$ui(id = "test"))
+
+  testthat::expect_true(grepl(varlabel, ui_character))
+})