diff --git a/src/gitea_mcp/server.py b/src/gitea_mcp/server.py
index 0be445d..63f7755 100644
--- a/src/gitea_mcp/server.py
+++ b/src/gitea_mcp/server.py
@@ -9,7 +9,14 @@ from mcp.types import Tool, TextContent
 from . import __version__
 from .auth import AuthConfig
 from .client import GiteaClient, GiteaClientError
-from .tools import get_issue_tools, handle_issue_tool, get_label_tools, handle_label_tool
+from .tools import (
+    get_issue_tools,
+    handle_issue_tool,
+    get_label_tools,
+    handle_label_tool,
+    get_milestone_tools,
+    handle_milestone_tool,
+)
 
 
 # Global client instance
@@ -36,11 +43,12 @@ async def serve() -> None:
         """List available MCP tools.
 
         Returns:
-            list: Available tools including issue and label operations.
+            list: Available tools including issue, label, and milestone operations.
         """
-        # Get issue and label tools
+        # Get issue, label, and milestone tools
         tools = get_issue_tools()
         tools.extend(get_label_tools())
+        tools.extend(get_milestone_tools())
 
         # Placeholder for future tools (PR tools, etc.)
         tools.extend([
@@ -115,6 +123,12 @@ async def serve() -> None:
         ):
             return await handle_label_tool(gitea_client, name, arguments)
 
+        # Handle milestone tools
+        if name.startswith("gitea_") and any(
+            name.endswith(suffix) for suffix in ["_milestones", "_milestone"]
+        ):
+            return await handle_milestone_tool(name, arguments, gitea_client)
+
         # Placeholder for other tools
         return [
             TextContent(
diff --git a/src/gitea_mcp/tools/__init__.py b/src/gitea_mcp/tools/__init__.py
index 26875c2..f071371 100644
--- a/src/gitea_mcp/tools/__init__.py
+++ b/src/gitea_mcp/tools/__init__.py
@@ -2,10 +2,13 @@
 
 from .issues import get_issue_tools, handle_issue_tool
 from .labels import get_label_tools, handle_label_tool
+from .milestones import get_milestone_tools, handle_milestone_tool
 
 __all__ = [
     "get_issue_tools",
     "handle_issue_tool",
     "get_label_tools",
     "handle_label_tool",
+    "get_milestone_tools",
+    "handle_milestone_tool",
 ]
diff --git a/src/gitea_mcp/tools/labels.py b/src/gitea_mcp/tools/labels.py
new file mode 100644
index 0000000..0f8a286
--- /dev/null
+++ b/src/gitea_mcp/tools/labels.py
@@ -0,0 +1,170 @@
+"""Gitea label operations MCP tools."""
+
+from mcp.types import Tool, TextContent
+
+from ..client import GiteaClient, GiteaClientError
+
+
+def get_label_tools() -> list[Tool]:
+    """Get label operation tool definitions.
+
+    Returns:
+        list: Tool definitions for label operations.
+    """
+    return [
+        Tool(
+            name="gitea_list_labels",
+            description="List all labels in a Gitea repository",
+            inputSchema={
+                "type": "object",
+                "properties": {
+                    "owner": {
+                        "type": "string",
+                        "description": "Repository owner (user or organization)",
+                    },
+                    "repo": {
+                        "type": "string",
+                        "description": "Repository name",
+                    },
+                },
+                "required": ["owner", "repo"],
+            },
+        ),
+        Tool(
+            name="gitea_create_label",
+            description="Create a new label in a Gitea repository",
+            inputSchema={
+                "type": "object",
+                "properties": {
+                    "owner": {
+                        "type": "string",
+                        "description": "Repository owner (user or organization)",
+                    },
+                    "repo": {
+                        "type": "string",
+                        "description": "Repository name",
+                    },
+                    "name": {
+                        "type": "string",
+                        "description": "Label name",
+                    },
+                    "color": {
+                        "type": "string",
+                        "description": "Label color (hex without #, e.g., 'ff0000' for red)",
+                    },
+                    "description": {
+                        "type": "string",
+                        "description": "Label description (optional)",
+                    },
+                },
+                "required": ["owner", "repo", "name", "color"],
+            },
+        ),
+    ]
+
+
+async def handle_label_tool(
+    client: GiteaClient, name: str, arguments: dict
+) -> list[TextContent]:
+    """Handle label tool execution.
+
+    Args:
+        client: Gitea client instance.
+        name: Tool name.
+        arguments: Tool arguments.
+
+    Returns:
+        list: Tool response content.
+    """
+    try:
+        async with client:
+            if name == "gitea_list_labels":
+                return await _list_labels(client, arguments)
+            elif name == "gitea_create_label":
+                return await _create_label(client, arguments)
+            else:
+                return [
+                    TextContent(
+                        type="text",
+                        text=f"Unknown label tool: {name}",
+                    )
+                ]
+    except GiteaClientError as e:
+        return [
+            TextContent(
+                type="text",
+                text=f"Gitea API error: {e}",
+            )
+        ]
+
+
+async def _list_labels(client: GiteaClient, arguments: dict) -> list[TextContent]:
+    """List labels in a repository.
+
+    Args:
+        client: Gitea client instance.
+        arguments: Tool arguments with owner and repo.
+
+    Returns:
+        list: Label listing response.
+    """
+    owner = arguments["owner"]
+    repo = arguments["repo"]
+
+    labels = await client.get(f"/repos/{owner}/{repo}/labels")
+
+    if not labels:
+        return [
+            TextContent(
+                type="text",
+                text=f"No labels found in {owner}/{repo}",
+            )
+        ]
+
+    # Format labels for display
+    lines = [f"Labels in {owner}/{repo}:", ""]
+    for label in labels:
+        color = label.get("color", "")
+        desc = label.get("description", "")
+        desc_text = f" - {desc}" if desc else ""
+        lines.append(f"  • {label['name']} (#{color}){desc_text}")
+
+    return [
+        TextContent(
+            type="text",
+            text="\n".join(lines),
+        )
+    ]
+
+
+async def _create_label(client: GiteaClient, arguments: dict) -> list[TextContent]:
+    """Create a new label.
+
+    Args:
+        client: Gitea client instance.
+        arguments: Tool arguments with owner, repo, name, color, and optional description.
+
+    Returns:
+        list: Creation response.
+    """
+    owner = arguments["owner"]
+    repo = arguments["repo"]
+    name = arguments["name"]
+    color = arguments["color"].lstrip("#")  # Remove # if present
+    description = arguments.get("description", "")
+
+    payload = {
+        "name": name,
+        "color": color,
+    }
+    if description:
+        payload["description"] = description
+
+    label = await client.post(f"/repos/{owner}/{repo}/labels", payload)
+
+    return [
+        TextContent(
+            type="text",
+            text=f"Created label '{label['name']}' (#{label['color']}) in {owner}/{repo}",
+        )
+    ]