Labeling theory posits that self-identity and the behavior of individuals may be determined or influenced by the terms used to describe or classify them. It is associated with the concepts of self-fulfilling prophecy and stereotyping. Labeling theory holds that deviance is not inherent in an act, but instead focuses on the tendency of majorities to negatively label minorities or those seen as deviant from standard cultural norms. The theory was prominent during the 1960s and 1970s, and some modified versions of the theory have developed and are still currently popular. Stigma is defined as a powerfully negative label that changes a person's self-concept and social identity.

Labeling theory is closely related to social-construction and symbolic-interaction analysis. Labeling theory was developed by sociologists during the 1960s. Howard Saul Becker's book Outsiders was extremely influential in the development of this theory and its rise to popularity.

Labeling theory is also connected to other fields besides crime. For instance there is the labeling theory that corresponds to homosexuality. Alfred Kinsey and his colleagues were the main advocates in separating the difference between the role of a "homosexual" and the acts one does. An example is the idea that males performing feminine acts would imply that they are homosexual. Thomas J. Scheff states that labeling also plays a part with the "mentally ill". The label does not refer to criminal but rather acts that are not socially accepted due to mental disorders.