diff --git a/lib/factory-label.js b/lib/factory-label.js
index d6cfa44..458fa5c 100644
--- a/lib/factory-label.js
+++ b/lib/factory-label.js
@@ -1,12 +1,11 @@
 module.exports = createLabel
 
 var markdownLineEnding = require('micromark/dist/character/markdown-line-ending')
-var markdownSpace = require('micromark/dist/character/markdown-space')
 
 // This is a fork of:
 // <https://github.com/micromark/micromark/blob/bf53bf9/lib/tokenize/factory-label.js>
-// to allow empty, support text instead of strings, and optionally w/o EOLs,
-// labels.
+// to allow empty labels, balanced brackets (such as for nested directives),
+// text instead of strings, and optionally disallows EOLs.
 
 // eslint-disable-next-line max-params
 function createLabel(
@@ -16,11 +15,10 @@ function createLabel(
   type,
   markerType,
   stringType,
-  allowEmpty,
   disallowEol
 ) {
   var size = 0
-  var data
+  var balance = 0
 
   return start
 
@@ -35,7 +33,7 @@ function createLabel(
   }
 
   function afterStart(code) {
-    if (code === 93 /* `]` */ && allowEmpty) {
+    if (code === 93 /* `]` */) {
       effects.enter(markerType)
       effects.consume(code)
       effects.exit(markerType)
@@ -50,21 +48,14 @@ function createLabel(
   function atBreak(code) {
     if (
       code === null /* EOF */ ||
-      code === 91 /* `[` */ ||
-      (code === 93 /* `]` */ && !data && !allowEmpty) ||
       /* <https://github.com/micromark/micromark/blob/bf53bf9/lib/constant/constants.js#L34> */
       size > 999
     ) {
       return nok(code)
     }
 
-    if (code === 93 /* `]` */) {
-      effects.exit(stringType)
-      effects.enter(markerType)
-      effects.consume(code)
-      effects.exit(markerType)
-      effects.exit(type)
-      return ok
+    if (code === 93 /* `]` */ && !balance--) {
+      return atClosingBrace(code)
     }
 
     if (markdownLineEnding(code)) {
@@ -85,8 +76,6 @@ function createLabel(
   function label(code) {
     if (
       code === null /* EOF */ ||
-      code === 91 /* `[` */ ||
-      code === 93 /* `]` */ ||
       markdownLineEnding(code) ||
       /* <https://github.com/micromark/micromark/blob/bf53bf9/lib/constant/constants.js#L34> */
       size > 999
@@ -95,11 +84,28 @@ function createLabel(
       return atBreak(code)
     }
 
+    if (code === 91 /* `[` */ && ++balance > 3) {
+      return nok(code)
+    }
+
+    if (code === 93 /* `]` */ && !balance--) {
+      effects.exit('chunkText')
+      return atClosingBrace(code)
+    }
+
     effects.consume(code)
-    data = data || !markdownSpace(code)
     return code === 92 /* `\` */ ? labelEscape : label
   }
 
+  function atClosingBrace(code) {
+    effects.exit(stringType)
+    effects.enter(markerType)
+    effects.consume(code)
+    effects.exit(markerType)
+    effects.exit(type)
+    return ok
+  }
+
   function labelEscape(code) {
     if (
       code === 91 /* `[` */ ||
diff --git a/lib/tokenize-directive-container.js b/lib/tokenize-directive-container.js
index e288da7..0cea1d8 100644
--- a/lib/tokenize-directive-container.js
+++ b/lib/tokenize-directive-container.js
@@ -184,7 +184,6 @@ function tokenizeLabel(effects, ok, nok) {
     'directiveContainerLabel',
     'directiveContainerLabelMarker',
     'directiveContainerLabelString',
-    true,
     true
   )
 }
diff --git a/lib/tokenize-directive-leaf.js b/lib/tokenize-directive-leaf.js
index 07c3295..fcbac8d 100644
--- a/lib/tokenize-directive-leaf.js
+++ b/lib/tokenize-directive-leaf.js
@@ -69,7 +69,6 @@ function tokenizeLabel(effects, ok, nok) {
     'directiveLeafLabel',
     'directiveLeafLabelMarker',
     'directiveLeafLabelString',
-    true,
     true
   )
 }
diff --git a/lib/tokenize-directive-text.js b/lib/tokenize-directive-text.js
index 00aff94..ffffba8 100644
--- a/lib/tokenize-directive-text.js
+++ b/lib/tokenize-directive-text.js
@@ -65,8 +65,7 @@ function tokenizeLabel(effects, ok, nok) {
     nok,
     'directiveTextLabel',
     'directiveTextLabelMarker',
-    'directiveTextLabelString',
-    true
+    'directiveTextLabelString'
   )
 }
 
diff --git a/readme.md b/readme.md
index be23acb..2239867 100644
--- a/readme.md
+++ b/readme.md
@@ -188,8 +188,6 @@ this implementation mimics CommonMark as closely as possible:
     label (~~`:a []`~~), name and attributes (~~`:a {}`~~), or label and
     attributes (~~`:a[] {}`~~) — because it’s not allowed in links either
     (~~`[] ()`~~)
-*   Only escaped brackets are allow in the label (~~`:a[b[c]d]`~~) — because
-    links in links are not allowed either
 *   No trailing colons allowed on the opening fence of a container
     (~~`:::a:::`~~) — because it’s not allowed in fenced code either
 *   The label and attributes in a leaf or container cannot include line endings
diff --git a/test.js b/test.js
index 111d2c2..4dbab6c 100644
--- a/test.js
+++ b/test.js
@@ -114,6 +114,12 @@ test('micromark-extension-directive (syntax)', function (t) {
       'should support markdown in an label'
     )
 
+    t.equal(
+      micromark('a :b[c :d[e] f] g', options()),
+      '<p>a  g</p>',
+      'should support a directive in an label'
+    )
+
     t.equal(
       micromark(':a[]asd', options()),
       '<p>asd</p>',
@@ -1120,6 +1126,12 @@ test('micromark-extension-directive (compile)', function (t) {
     'should support fall through directives (`*`)'
   )
 
+  t.equal(
+    micromark(':a[:img{src="x" alt=y}]{href="z"}', options({'*': h})),
+    '<p><a href="z"><img src="x" alt="y"></a></p>',
+    'should support fall through directives (`*`)'
+  )
+
   t.end()
 })
 
@@ -1136,6 +1148,24 @@ test('content', function (t) {
     'should support escaped brackets in a label'
   )
 
+  t.equal(
+    micromark(':abbr[x[y]z]', options({abbr: abbr})),
+    '<p><abbr>x[y]z</abbr></p>',
+    'should support balanced brackets in a label'
+  )
+
+  t.equal(
+    micromark(':abbr[a[b[c[d]e]f]g]h', options({abbr: abbr})),
+    '<p><abbr>a[b[c[d]e]f]g</abbr>h</p>',
+    'should support balanced brackets in a label, three levels deep'
+  )
+
+  t.equal(
+    micromark(':abbr[a[b[c[d[e]f]g]h]i]j', options({abbr: abbr})),
+    '<p><abbr></abbr>[a[b[c[d[e]f]g]h]i]j</p>',
+    'should *not* support balanced brackets in a label, four levels deep'
+  )
+
   t.equal(
     micromark(':abbr[a\nb\rc]', options({abbr: abbr})),
     '<p><abbr>a\nb\rc</abbr></p>',