diff --git a/apps/wallet/src/App.tsx b/apps/wallet/src/App.tsx
index 5855899..5e6b927 100644
--- a/apps/wallet/src/App.tsx
+++ b/apps/wallet/src/App.tsx
@@ -195,6 +195,18 @@ function App() {
     }
   };
 
+  const renameIdentity = async (identity: LocalIdentitySummary, nickname?: string) => {
+    await walletAdapter.setLabel(identity.localId, nickname);
+    await refresh();
+    setNotice({
+      kind: 'success',
+      message:
+        nickname === undefined
+          ? 'Local identity nickname removed.'
+          : `Local identity nickname changed to “${nickname}”.`,
+    });
+  };
+
   const issueDevice = async (
     identity: LocalIdentitySummary,
     options: IssueDeviceTransferOptions,
@@ -392,7 +404,7 @@ function App() {
               Identity wallet
             </h2>
             <p className="mt-1 text-sm text-slate-500">
-              Local labels and app scopes never leave this wallet.
+              Local nicknames and app scopes never leave this wallet.
             </p>
           </div>
           <div className="flex gap-2 text-xs font-medium text-slate-600">
@@ -485,6 +497,7 @@ function App() {
               onRetryRegistration={() => void retryRegistration(selectedIdentity)}
               clearingHistory={clearingHistoryId === selectedIdentity.localId}
               onClearHistory={() => clearAuthorizationHistory(selectedIdentity)}
+              onRename={(nickname) => renameIdentity(selectedIdentity, nickname)}
               onAddDevice={() => setFlow({ type: 'issue-device', identity: selectedIdentity })}
               onActivateDevice={() => activateDevice(selectedIdentity)}
               onSelfRevokeDevice={() =>
diff --git a/apps/wallet/src/components/DeviceManagement.tsx b/apps/wallet/src/components/DeviceManagement.tsx
index 52843db..49f87cc 100644
--- a/apps/wallet/src/components/DeviceManagement.tsx
+++ b/apps/wallet/src/components/DeviceManagement.tsx
@@ -146,7 +146,7 @@ export function IssueDeviceModal({ identity, onClose, onIssue }: IssueDeviceModa
           <TransferMethodSelector method={method} onChange={setMethod} disabled={state.busy} />
           <div>
             <label htmlFor="device-label" className="ml-1 block text-sm font-medium text-slate-700">
-              Device label <span className="font-normal text-slate-400">(local only)</span>
+              Device nickname <span className="font-normal text-slate-400">(local only)</span>
             </label>
             <input
               id="device-label"
diff --git a/apps/wallet/src/components/IdentityDetail.tsx b/apps/wallet/src/components/IdentityDetail.tsx
index 5892dba..e566794 100644
--- a/apps/wallet/src/components/IdentityDetail.tsx
+++ b/apps/wallet/src/components/IdentityDetail.tsx
@@ -9,6 +9,7 @@ import {
   KeySquare,
   Link2,
   Loader2,
+  Pencil,
   Plus,
   RefreshCw,
   ShieldCheck,
@@ -36,6 +37,7 @@ interface IdentityDetailProps {
   onRetryRegistration: () => void;
   clearingHistory: boolean;
   onClearHistory: () => Promise<void>;
+  onRename: (nickname?: string) => Promise<void>;
   onAddDevice: () => void;
   onActivateDevice: () => Promise<void>;
   onSelfRevokeDevice: () => void;
@@ -53,6 +55,7 @@ export function IdentityDetail({
   onRetryRegistration,
   clearingHistory,
   onClearHistory,
+  onRename,
   onAddDevice,
   onActivateDevice,
   onSelfRevokeDevice,
@@ -62,6 +65,10 @@ export function IdentityDetail({
   const active = identity.localState === 'active';
   const registeredActions = canUseRegisteredIdentityActions(identity);
   const [confirmClearHistory, setConfirmClearHistory] = useState(false);
+  const [editingNickname, setEditingNickname] = useState(false);
+  const [nickname, setNickname] = useState(identity.label ?? '');
+  const [renaming, setRenaming] = useState(false);
+  const [renameError, setRenameError] = useState<string>();
   const [now, setNow] = useState(() => Math.floor(Date.now() / 1_000));
   const deviceCapabilities = deviceManagementCapabilities(identity, now);
 
@@ -74,6 +81,34 @@ export function IdentityDetail({
     return () => window.clearTimeout(handle);
   }, [identity.device, now]);
 
+  useEffect(() => {
+    if (!editingNickname) setNickname(identity.label ?? '');
+  }, [editingNickname, identity.label]);
+
+  const saveNickname = async () => {
+    const normalized = nickname.trim();
+    if (normalized.length > 128) {
+      setRenameError('The nickname cannot exceed 128 characters.');
+      return;
+    }
+    setRenaming(true);
+    setRenameError(undefined);
+    try {
+      await onRename(normalized === '' ? undefined : normalized);
+      setEditingNickname(false);
+    } catch (error) {
+      setRenameError(error instanceof Error ? error.message : 'The nickname could not be saved.');
+    } finally {
+      setRenaming(false);
+    }
+  };
+
+  const cancelNickname = () => {
+    setNickname(identity.label ?? '');
+    setRenameError(undefined);
+    setEditingNickname(false);
+  };
+
   const clearHistory = async () => {
     if (!confirmClearHistory) {
       setConfirmClearHistory(true);
@@ -101,12 +136,71 @@ export function IdentityDetail({
               <p className="text-xs font-semibold uppercase tracking-wider text-indigo-600">
                 Local identity
               </p>
-              <h2
-                id="identity-details-title"
-                className="mt-0.5 truncate text-xl font-bold text-slate-900"
-              >
-                {identity.label ?? 'Untitled identity'}
-              </h2>
+              <div className="mt-0.5 flex items-center gap-2">
+                <h2
+                  id="identity-details-title"
+                  className="truncate text-xl font-bold text-slate-900"
+                >
+                  {identity.label ?? 'Untitled identity'}
+                </h2>
+                {!editingNickname && (
+                  <button
+                    type="button"
+                    onClick={() => setEditingNickname(true)}
+                    className="shrink-0 rounded-lg p-1.5 text-slate-400 transition-colors hover:bg-indigo-50 hover:text-indigo-700"
+                    aria-label="Edit identity nickname"
+                  >
+                    <Pencil className="h-3.5 w-3.5" aria-hidden="true" />
+                  </button>
+                )}
+              </div>
+              {editingNickname && (
+                <form
+                  className="mt-3"
+                  onSubmit={(event) => {
+                    event.preventDefault();
+                    void saveNickname();
+                  }}
+                >
+                  <label htmlFor="identity-nickname" className="sr-only">
+                    Identity nickname
+                  </label>
+                  <div className="flex flex-wrap gap-2">
+                    <input
+                      id="identity-nickname"
+                      autoFocus
+                      value={nickname}
+                      onChange={(event) => setNickname(event.target.value)}
+                      maxLength={128}
+                      autoComplete="off"
+                      placeholder="Nickname on this wallet"
+                      disabled={renaming}
+                      className="min-w-48 flex-1 rounded-lg border border-slate-300 px-3 py-2 text-sm font-medium text-slate-900 shadow-sm focus:border-indigo-500 focus:ring-2 focus:ring-indigo-500"
+                    />
+                    <button type="submit" disabled={renaming} className={smallPrimaryButton}>
+                      {renaming && <Loader2 className="h-3.5 w-3.5 animate-spin" />}
+                      {renaming ? 'Saving…' : 'Save'}
+                    </button>
+                    <button
+                      type="button"
+                      onClick={cancelNickname}
+                      disabled={renaming}
+                      className="rounded-lg border border-slate-200 px-3 py-2 text-xs font-semibold text-slate-600 hover:bg-slate-50 disabled:opacity-50"
+                    >
+                      Cancel
+                    </button>
+                  </div>
+                  <p className="mt-1.5 text-xs leading-relaxed text-slate-400">
+                    Stored only in this wallet. It does not change your identity or appear in
+                    proofs.
+                  </p>
+                  {renameError !== undefined && (
+                    <p role="alert" className="mt-1.5 text-xs font-medium text-rose-700">
+                      {renameError}
+                    </p>
+                  )}
+                </form>
+              )}
             </div>
           </div>
           <button
diff --git a/apps/wallet/src/components/ModalShell.tsx b/apps/wallet/src/components/ModalShell.tsx
index 8572120..92c426a 100644
--- a/apps/wallet/src/components/ModalShell.tsx
+++ b/apps/wallet/src/components/ModalShell.tsx
@@ -24,6 +24,10 @@ export function ModalShell({
   const titleId = useId();
   const descriptionId = useId();
   const panelRef = useRef<HTMLDivElement>(null);
+  const onCloseRef = useRef(onClose);
+  const closeDisabledRef = useRef(closeDisabled);
+  onCloseRef.current = onClose;
+  closeDisabledRef.current = closeDisabled;
 
   useEffect(() => {
     const previousFocus =
@@ -37,9 +41,9 @@ export function ModalShell({
     document.body.style.overflow = 'hidden';
 
     const onKeyDown = (event: KeyboardEvent) => {
-      if (event.key === 'Escape' && !closeDisabled) {
+      if (event.key === 'Escape' && !closeDisabledRef.current) {
         event.preventDefault();
-        onClose();
+        onCloseRef.current();
         return;
       }
       if (event.key !== 'Tab' || panel === null) return;
@@ -66,7 +70,7 @@ export function ModalShell({
       document.body.style.overflow = previousOverflow;
       previousFocus?.focus();
     };
-  }, [closeDisabled, onClose]);
+  }, []);
 
   return (
     <motion.div
diff --git a/apps/wallet/src/components/flows.tsx b/apps/wallet/src/components/flows.tsx
index e0d12ab..7103300 100644
--- a/apps/wallet/src/components/flows.tsx
+++ b/apps/wallet/src/components/flows.tsx
@@ -63,7 +63,7 @@ export function CreateIdentityModal({ onClose, onCreate }: CreateIdentityModalPr
       <form onSubmit={(event) => void submit(event)} className="space-y-5">
         <div>
           <label htmlFor="identity-label" className="ml-1 block text-sm font-medium text-slate-700">
-            Local label <span className="font-normal text-slate-400">(optional)</span>
+            Local nickname <span className="font-normal text-slate-400">(optional)</span>
           </label>
           <input
             id="identity-label"
@@ -241,7 +241,7 @@ export function RotateIdentityModal({ identity, onClose, onRotate }: RotateIdent
         </div>
         <div>
           <label htmlFor="rotated-label" className="ml-1 block text-sm font-medium text-slate-700">
-            New local label
+            New local nickname
           </label>
           <input
             id="rotated-label"
diff --git a/packages/wallet-core/src/wallet-core.ts b/packages/wallet-core/src/wallet-core.ts
index d155d4c..41cd638 100644
--- a/packages/wallet-core/src/wallet-core.ts
+++ b/packages/wallet-core/src/wallet-core.ts
@@ -1237,6 +1237,12 @@ export class WalletCore implements WalletCoreApi {
   }
 
   public async setLabel(localId: string, label?: string): Promise<void> {
+    if (label !== undefined && (label.length === 0 || label.length > 128)) {
+      throw new WalletCoreError(
+        'INVALID_REQUEST',
+        'A local identity nickname must contain between 1 and 128 characters.',
+      );
+    }
     await this.#updateRecord(localId, (latest) => {
       if (label !== undefined) return { ...latest, label };
       const withoutLabel = { ...latest };
diff --git a/packages/wallet-core/test/device-v2.test.ts b/packages/wallet-core/test/device-v2.test.ts
index 4d7b43d..0f98870 100644
--- a/packages/wallet-core/test/device-v2.test.ts
+++ b/packages/wallet-core/test/device-v2.test.ts
@@ -426,6 +426,16 @@ describe('v2 root-authorized devices', () => {
     );
     expect(importedSummary?.hasAgreementKey).toBe(false);
 
+    await wallet.setLabel(imported.localId, 'Travel phone');
+    expect(
+      (await wallet.listIdentitySummaries()).find(
+        (summary) => summary.localId === imported.localId,
+      ),
+    ).toMatchObject({ label: 'Travel phone' });
+    await expect(wallet.setLabel(imported.localId, 'x'.repeat(129))).rejects.toMatchObject({
+      code: 'INVALID_REQUEST',
+    });
+
     const proofRequest = proofRequestSchema.parse({
       action: 'post.edit',
       resource: 'post:01JABC',
diff --git a/tests/browser-e2e/security.spec.ts b/tests/browser-e2e/security.spec.ts
index f756e9a..1b3d5a9 100644
--- a/tests/browser-e2e/security.spec.ts
+++ b/tests/browser-e2e/security.spec.ts
@@ -91,7 +91,7 @@ test.describe.serial('Nexus browser security boundary', () => {
       wallet.getByRole('heading', { name: 'Choose who you are, each time.' }),
     ).toBeVisible();
     await wallet.getByRole('button', { name: 'Create first identity' }).click();
-    await wallet.getByLabel('Local label (optional)').fill(IDENTITY_LABEL);
+    await wallet.getByLabel('Local nickname (optional)').fill(IDENTITY_LABEL);
     await wallet.getByRole('button', { name: 'Create identity' }).click();
     await expect(wallet.getByRole('heading', { name: IDENTITY_LABEL }).first()).toBeVisible();
     await wallet.close();
@@ -195,7 +195,7 @@ test.describe.serial('Nexus browser security boundary', () => {
       const wallet = await v2Context.newPage();
       await wallet.goto(WALLET_ORIGIN);
       await wallet.getByRole('button', { name: 'Create first identity' }).click();
-      await wallet.getByLabel('Local label (optional)').fill('E2E v2 root');
+      await wallet.getByLabel('Local nickname (optional)').fill('E2E v2 root');
       await wallet.getByRole('button', { name: 'Create identity' }).click();
       await expect(wallet.getByRole('heading', { name: 'E2E v2 root' }).first()).toBeVisible();
 
@@ -218,7 +218,10 @@ test.describe.serial('Nexus browser security boundary', () => {
       await wallet.getByRole('button', { name: 'View details' }).click();
       await expect(wallet.getByRole('button', { name: 'Hide details' })).toBeVisible();
       await wallet.getByRole('button', { name: 'Add device' }).click();
-      await wallet.getByLabel('Device label').fill('E2E delegated device');
+      const deviceNickname = wallet.getByLabel('Device nickname');
+      await deviceNickname.focus();
+      await deviceNickname.pressSequentially('E2E delegated device');
+      await expect(deviceNickname).toBeFocused();
       await wallet.getByRole('checkbox').check();
       await wallet.getByRole('button', { name: 'Create device transfer' }).click();
       await expect(wallet.getByText('Device authorized', { exact: true })).toBeVisible();
@@ -239,6 +242,10 @@ test.describe.serial('Nexus browser security boundary', () => {
         wallet.getByText('Device installed and activated for this identity.', { exact: true }),
       ).toBeVisible();
       await expect(wallet.getByText('Active device', { exact: true })).toBeVisible();
+      await wallet.getByLabel('Edit identity nickname').click();
+      await wallet.getByLabel('Identity nickname').fill('E2E phone');
+      await wallet.getByRole('button', { name: 'Save', exact: true }).click();
+      await expect(wallet.getByRole('heading', { name: 'E2E phone' }).first()).toBeVisible();
 
       await rp.reload();
       const popupPromise = rp.waitForEvent('popup');