Label-forming and applying apparatus is provided which dispenses a web (36) of label material presenting individual labels (80) with respective boundaries, and individually cuts such labels using one or more laser beams (52). The laser unit (14) is equipped with a controller (50) having an electronic memory which stores information about the label boundaries, so that the laser unit (14) can be precisely controlled in order to successively cut labels from the web. An applicator assembly (16) is also provided which picks up the cut labels and transfers the labels to an application station where they are applied to respective articles (18).