diff --git a/crates/egui/src/widgets/label.rs b/crates/egui/src/widgets/label.rs
index d2085d4fb49..16217e8511d 100644
--- a/crates/egui/src/widgets/label.rs
+++ b/crates/egui/src/widgets/label.rs
@@ -181,6 +181,16 @@ impl Label {
 
             let pos = pos2(ui.max_rect().left(), ui.cursor().top());
             assert!(!galley.rows.is_empty(), "Galleys are never empty");
+
+            // set the row height to ensure the cursor advancement is correct. when creating a child ui such as with
+            // ui.horizontal_wrapped, the initial cursor will be set to the height of the child ui. this can lead
+            // to the cursor not advancing to the second row but rather expanding the height of the cursor.
+            //
+            // note that we do not set the row height earlier in this function as we do want to allow populating
+            // `first_row_min_height` above. however it is crucial the placer knows the actual row height by
+            // setting the cursor height before ui.allocate_rect() gets called.
+            ui.set_row_height(galley.rows[0].height());
+
             // collect a response from many rows:
             let rect = galley.rows[0].rect.translate(vec2(pos.x, pos.y));
             let mut response = ui.allocate_rect(rect, sense);