A system and method for connection labeling for use with connection pools, including support for cloud-based multi-tenant environments using connection labeling. In accordance with an embodiment, the system comprises a connection pool, including a plurality of connection objects which provide connections that software applications can use to make requests to access the database, wherein each of the connections can be labeled according to the configuration of particular applications; and a connection pool logic that identifies connections labeled as high-cost connections, and controls the creation or repurposing of high-cost connections to serve requests from the multiple tenants or tenant applications.