diff --git a/mail/components/preferences/display.js b/mail/components/preferences/display.js
index 6ccb4c3e1a19..14c94d6e3a55 100644
--- a/mail/components/preferences/display.js
+++ b/mail/components/preferences/display.js
@@ -38,6 +38,7 @@
 
 var gDisplayPane = {
   mInitialized: false,
+  mTagListBox:  null,
 
   init: function ()
   {
@@ -51,6 +52,9 @@ var gDisplayPane = {
                               document.getElementById('mailnews.view_default_charset').value);
 
     this.mInitialized = true;
+    
+    this.mTagListBox = document.getElementById('tagList');    
+    this.buildTagList();
   },
 
   tabSelectionChanged: function ()
@@ -60,27 +64,56 @@ var gDisplayPane = {
               .valueFromPreferences = document.getElementById("displayPrefs").selectedIndex;
   },
 
-  restoreDefaultLabels: function()
-  {
-    for (var index = 1; index <= 5; index++)
-    {
-      // reset throws an exception if the pref value is already the default so
-      // work around that with some try/catch exception handling
-      try {
-        document.getElementById('mailnews.labels.description.' + index ).reset();
-      } catch (ex) {}
-
-      try {
-        document.getElementById('mailnews.labels.color.' + index ).reset();
-      } catch (ex) {}
-    }
-  },
-
   fontOptionsDialog: function()
   {
     document.documentElement.openSubDialog("chrome://messenger/content/preferences/fonts.xul", "", null);  
   },
+  
+  // appends the tag to the tag list box
+  appendTagItem: function(aTagName, aKey, aColor)
+  {
+    var item = this.mTagListBox.appendItem(aTagName, aKey);
+    item.style.color = aColor;
+    return item;
+  },
+   
+  buildTagList: function()
+  {
+    var tagService = Components.classes["@mozilla.org/messenger/tagservice;1"].getService(Components.interfaces.nsIMsgTagService);
+    var allTags = tagService.tagEnumerator;
+    var allKeys = tagService.keyEnumerator;
+    while (allTags.hasMore())
+    {
+      var key = allKeys.getNext();
+      this.appendTagItem(allTags.getNext(), key, tagService.getColorForKey(key));
+    }
+  },
+  
+  removeTag: function()
+  {
+    var tagItemToRemove = this.mTagListBox.getSelectedItem();
+    var index = this.mTagListBox.selectedIndex;
+    if (index >= 0)
+    {
+      var itemToRemove = this.mTagListBox.getItemAtIndex(index);
+      var tagService = Components.classes["@mozilla.org/messenger/tagservice;1"].getService(Components.interfaces.nsIMsgTagService);
+      tagService.deleteKey(itemToRemove.getAttribute("value"));
+      this.mTagListBox.removeItemAt(index);
+      var numItemsInListBox = this.mTagListBox.getRowCount();
+      this.mTagListBox.selectedIndex = index < numItemsInListBox ? index : numItemsInListBox - 1;
+    }
+  },
 
+  addTag: function()
+  {  
+    var args = {result: "", okCallback: addTagCallback};
+    var dialog = window.openDialog(
+			    "chrome://messenger/content/newTagDialog.xul",
+			    "",
+			    "chrome,titlebar,modal",
+			    args);
+  },
+     
   addMenuItem: function(aMenuPopup, aLabel, aValue)
   { 
     var menuItem = document.createElement('menuitem');
@@ -136,3 +169,15 @@ var gDisplayPane = {
     return undefined;
   }
 };
+
+function addTagCallback(aName, aColor)
+{
+  var tagService = Components.classes["@mozilla.org/messenger/tagservice;1"].getService(Components.interfaces.nsIMsgTagService);
+  tagService.addTag(aName, aColor);
+ 
+  var item = gDisplayPane.appendTagItem(aName, tagService.getKeyForTag(aName), aColor);
+  var tagListBox = document.getElementById('tagList');
+  tagListBox.ensureElementIsVisible(item);
+  tagListBox.selectItem(item);
+  tagListBox.focus();
+}
diff --git a/mail/components/preferences/display.xul b/mail/components/preferences/display.xul
index 7269e3f45459..e11d67eee181 100644
--- a/mail/components/preferences/display.xul
+++ b/mail/components/preferences/display.xul
@@ -81,7 +81,7 @@
     <tabbox id="displayPrefs" flex="1" onselect="gDisplayPane.tabSelectionChanged();">
       <tabs>
         <tab label="&itemFormatting.label;"/>
-        <tab label="&itemLabels.label;"/>
+        <tab label="&itemTags.label;"/>
         <tab label="&itemFonts.label;"/>
       </tabs>
       
@@ -152,54 +152,16 @@
         </tabpanel>
 
         <tabpanel orient="vertical">
-          <groupbox>
-            <caption label="&labelsSettings.label;"/> 
-            <description>&displayLabelsText.label;</description>
-            <hbox align="top">
-              <vbox>
-                <!-- label color: 1 (default red) -->
-                <hbox class="indent" align="center">
-                  <textbox id="label1TextBox" preference="mailnews.labels.description.1" />
-                  <colorpicker class="small-margin" type="button" id="labelColorPicker1"
-                               palettename="standard" preference="mailnews.labels.color.1"/>
-                </hbox>    
-
-                <!-- label color: 2 (default orange) -->
-                <hbox class="indent" align="center">
-                  <textbox id="label2TextBox" preference="mailnews.labels.description.2" />
-                  <colorpicker class="small-margin" type="button" id="labelColorPicker2"
-                               palettename="standard" preference="mailnews.labels.color.2"/>
-                </hbox>    
-
-                <!-- label color: 3 (default green) -->
-                <hbox class="indent" align="center">
-                  <textbox id="label3TextBox" preference="mailnews.labels.description.3" />
-                  <colorpicker class="small-margin" type="button" id="labelColorPicker3"
-                               palettename="standard" preference="mailnews.labels.color.3"/>
-                </hbox>  
-              </vbox>
-
-              <vbox>
-                <!-- label color: 4 (default blue) -->
-                <hbox class="indent" align="center">
-                  <textbox id="label4TextBox" preference="mailnews.labels.description.4" />
-                  <colorpicker class="small-margin" type="button" id="labelColorPicker4"
-                               palettename="standard" preference="mailnews.labels.color.4"/>
-                </hbox>    
-
-                <!-- label color: 5 (default purple) -->
-                <hbox class="indent" align="center">
-                  <textbox id="label5TextBox" preference="mailnews.labels.description.5" />
-                  <colorpicker class="small-margin" type="button" id="labelColorPicker5"
-                               palettename="standard" preference="mailnews.labels.color.5"/>
-                </hbox>   
-              </vbox>
-            </hbox>
-                <hbox pack="end">
-                  <button label="&restoreDefaults.label;" accesskey="&restoreDefaults.accesskey;" 
-                          oncommand="gDisplayPane.restoreDefaultLabels();"/>
-                </hbox> 
-          </groupbox>
+            <description>&displayTagsText.label;</description>
+          <hbox>
+            <listbox id="tagList" flex="1" rows="10"/>
+            <vbox>
+              <button label="&addTagButton.label;" accesskey="&addTagButton.accesskey;"
+                      oncommand="gDisplayPane.addTag();"/>
+              <button label="&removeTagButton.label;" accesskey="&removeTagButton.accesskey;" 
+                      oncommand="gDisplayPane.removeTag();"/>
+            </vbox>
+          </hbox>
         </tabpanel>
 
         <tabpanel orient="vertical">
diff --git a/mail/locales/en-US/chrome/messenger/preferences/display.dtd b/mail/locales/en-US/chrome/messenger/preferences/display.dtd
index b5a8d9c5dfe2..ca67fe0e4362 100644
--- a/mail/locales/en-US/chrome/messenger/preferences/display.dtd
+++ b/mail/locales/en-US/chrome/messenger/preferences/display.dtd
@@ -1,5 +1,5 @@
 <!ENTITY itemFormatting.label             "Formatting">
-<!ENTITY itemLabels.label                 "Labels">
+<!ENTITY itemTags.label                   "Tags">
 <!ENTITY itemFonts.label                  "Fonts">
 
 <!ENTITY textBegin.label                  "Quoted plain text appearance">
@@ -33,17 +33,20 @@
 <!ENTITY convertEmoticons.accesskey       "D">
 <!ENTITY htmlColors.label                 "HTML Messages">
 <!ENTITY overrideSender.label             "When displaying HTML messages, use the following:">
-<!ENTITY overrideSender.accesskey         "e"> 
+<!ENTITY overrideSender.accesskey         "n"> 
 <!ENTITY  textColor.label                 "Text Color:">
 <!ENTITY  textColor.accesskey             "T">
 <!ENTITY  backgroundColor.label           "Background Color:">
 <!ENTITY  backgroundColor.accesskey       "b">
 
 <!-- labels -->
-<!ENTITY labelsSettings.label       "Labels">
-<!ENTITY displayLabelsText.label    "Labels can be used to categorize and prioritize your messages.">
-<!ENTITY restoreDefaults.label      "Restore Defaults">
-<!ENTITY restoreDefaults.accesskey  "R">
+<!ENTITY displayTagsText.label    "Tags can be used to categorize and prioritize your messages.">
+<!ENTITY addTagButton.label       "Add">
+<!ENTITY addTagButton.accesskey   "A">
+<!ENTITY editTagButton.label      "Edit">
+<!ENTITY editTagButton.accesskey   "E">
+<!ENTITY removeTagButton.label    "Delete">
+<!ENTITY removeTagButton.accesskey "l">
 
 <!-- Fonts -->
 <!ENTITY fontsDescription.label       "Configure the fonts used by &brandShortName;">
diff --git a/mailnews/base/public/nsIMsgTagService.idl b/mailnews/base/public/nsIMsgTagService.idl
index 9a47ae1dde91..e81a323746f4 100755
--- a/mailnews/base/public/nsIMsgTagService.idl
+++ b/mailnews/base/public/nsIMsgTagService.idl
@@ -64,7 +64,7 @@ interface nsIMsgTagService : nsISupports {
   void addTagForKey(in ACString key, in AString tag, in ACString color);
   void addTag(in AString tag, in ACString color);
   ACString getColorForKey(in ACString key);
-  void deleteTag(in AString tag);
+  void deleteKey(in ACString key);
   // we need some way to enumerate all tags. Or return a list of all tags.
   readonly attribute nsIStringEnumerator tagEnumerator;
   readonly attribute nsIUTF8StringEnumerator keyEnumerator;
diff --git a/mailnews/base/src/nsMsgTagService.cpp b/mailnews/base/src/nsMsgTagService.cpp
index 2b4f93ce95fa..b23a18c43497 100755
--- a/mailnews/base/src/nsMsgTagService.cpp
+++ b/mailnews/base/src/nsMsgTagService.cpp
@@ -158,11 +158,17 @@ NS_IMETHODIMP nsMsgTagService::GetColorForKey(const nsACString &key, nsACString
 }
 
 /* void deleteTag (in wstring tag); */
-NS_IMETHODIMP nsMsgTagService::DeleteTag(const nsAString &tag)
+NS_IMETHODIMP nsMsgTagService::DeleteKey(const nsACString &key)
 {
-  // do we want to set a .deleted pref, or just set the tag
-  // property to "", or clear the pref(s)?
-    return NS_ERROR_NOT_IMPLEMENTED;
+  // clear the associated prefs
+  nsCAutoString prefName("mailnews.tags.");
+  prefName.Append(key);
+  prefName.AppendLiteral(".tag");
+  // this is the rv we're going to return - it's the interesting one.§
+  nsresult rv = m_prefBranch->ClearUserPref(prefName.get());
+  prefName.Replace(prefName.Length() - 3, 3, NS_LITERAL_CSTRING("color"));
+  m_prefBranch->ClearUserPref(prefName.get());
+  return rv;
 }
 
 /* readonly attribute nsIStringEnumerator tagEnumerator; */