Embodiments of the present invention provide a label distribution method and device. A first routing device sends a first BGP update message including a first VPN instance identifier and a first RT to a second routing device. The first routing device receives a second BGP update message including a second VPN instance identifier and a second RT. The first routing device allocates a first VPN instance label to a second VPN instance after the second routing device determines that the first RT is equal to the second RT. The first routing device sends a third BGP update message including the first VPN instance label to the second routing device.