The invention relates to a label separating apparatus in which, of labels formed in rows and columns on a continuous substrate being transported along a line of transport, labels found good and labels found defective upon determination of their quality are transported separately. The invention seeks to ensure that all of a plurality of defective labels possibly extant in any one of the rows can concurrently be transferred without fail selectively onto a different line of transport.The apparatus includes a primary conveyer in which a continuous substrate 21A is transported having labels 22A-22D, which are spaced apart from each other by a given distance and arranged in rows and columns, formed thereon and peelably adhered thereto. The primary conveyer includes a transport turn-back member 12A for permitting labels 22A-22D for each row concurrently to peel off the continuous substrate 21. In the apparatus, a label peeled off by the transport turn-back member 12A and found defective is subjected to an air blast by an air-blasting member 15A, 15B, 15C, 15D and is thereby oriented in transport towards a conveyer for defective labels 14 and adhered to on the conveyer for defective labels 14 while it is held by a label holding member 16 formed with an air draining vent 16C.