diff --git a/actions/setup/js/update_discussion.cjs b/actions/setup/js/update_discussion.cjs
index 01ad842c415..5a0d63a1161 100644
--- a/actions/setup/js/update_discussion.cjs
+++ b/actions/setup/js/update_discussion.cjs
@@ -292,7 +292,7 @@ function buildDiscussionUpdateData(item, config) {
     }
 
     const allowedLabels = config.allowed_labels || [];
-    const labelsResult = validateLabels(item.labels, allowedLabels.length > 0 ? allowedLabels : undefined);
+    const labelsResult = validateLabels(item.labels, allowedLabels.length > 0 ? allowedLabels : undefined, MAX_LABELS);
     if (!labelsResult.valid) {
       return { success: false, error: labelsResult.error ?? "Invalid labels" };
     }
diff --git a/actions/setup/js/update_discussion.test.cjs b/actions/setup/js/update_discussion.test.cjs
index 9e7357ca697..69770dad0b3 100644
--- a/actions/setup/js/update_discussion.test.cjs
+++ b/actions/setup/js/update_discussion.test.cjs
@@ -36,6 +36,13 @@ describe("update_discussion", () => {
     { id: "LA_kwDO2", name: "Label2" },
     { id: "LA_kwDO3", name: "Label3" },
     { id: "LA_kwDO4", name: "Label4" },
+    { id: "LA_kwDO5", name: "Label5" },
+    { id: "LA_kwDO6", name: "Label6" },
+    { id: "LA_kwDO7", name: "Label7" },
+    { id: "LA_kwDO8", name: "Label8" },
+    { id: "LA_kwDO9", name: "Label9" },
+    { id: "LA_kwDO10", name: "Label10" },
+    { id: "LA_kwDO11", name: "Label11" },
     { id: "LA_kwDO_bug", name: "bug" },
     { id: "LA_kwDO_feature", name: "feature" },
   ];
@@ -282,6 +289,50 @@ describe("update_discussion", () => {
       // Label1 has id "LA_kwDO1"
       expect(addCalls[0].variables.labelIds).toEqual(["LA_kwDO1"]);
     });
+
+    it("should allow up to MAX_LABELS (10) labels, not just 3 (issue: discussion labels limited to 3 per item)", async () => {
+      const handler = await main({
+        target: "*",
+        allow_labels: true,
+      });
+
+      // Agent requests 5 labels - previously this would truncate to 3
+      const result = await handler({ type: "update_discussion", labels: ["Label1", "Label2", "Label3", "Label4", "Label5"], discussion_number: 42 }, {});
+      expect(result.success).toBe(true);
+
+      // Must not call updateDiscussion mutation (labels-only update)
+      expect(getUpdateDiscussionMutations()).toHaveLength(0);
+
+      // All 5 labels should be applied, not truncated to 3
+      const addCalls = getAddLabelsCalls();
+      expect(addCalls).toHaveLength(1);
+      expect(addCalls[0].variables.labelIds).toEqual(["LA_kwDO1", "LA_kwDO2", "LA_kwDO3", "LA_kwDO4", "LA_kwDO5"]);
+    });
+
+    it("should reject when more than MAX_LABELS (10) labels are requested", async () => {
+      const handler = await main({
+        target: "*",
+        allow_labels: true,
+      });
+
+      // Agent requests 11 labels — exceeds MAX_LABELS limit
+      const result = await handler(
+        {
+          type: "update_discussion",
+          labels: ["Label1", "Label2", "Label3", "Label4", "Label5", "Label6", "Label7", "Label8", "Label9", "Label10", "Label11"],
+          discussion_number: 42,
+        },
+        {}
+      );
+
+      expect(result.success).toBe(false);
+      expect(result.error).toContain("E003");
+      expect(result.error).toContain("10");
+
+      // No label mutations should have been called
+      expect(getAddLabelsCalls()).toHaveLength(0);
+      expect(getRemoveLabelsCalls()).toHaveLength(0);
+    });
   });
 
   describe("title-only update", () => {