diff --git a/sequencer.c b/sequencer.c
index 863f4cb86cc15d..3fcc92f1cdc267 100644
--- a/sequencer.c
+++ b/sequencer.c
@@ -51,9 +51,13 @@
 
 #define GIT_REFLOG_ACTION "GIT_REFLOG_ACTION"
 
-#define GIT_MAX_LABEL_LENGTH ((NAME_MAX) - (LOCK_SUFFIX_LEN))
-
-#define GIT_MIN(a, b) ((a) < (b) ? (a) : (b))
+/*
+ * To accommodate common filesystem limitations, where the loose refs' file
+ * names must not exceed `NAME_MAX`, the labels generated by `git rebase
+ * --rebase-merges` need to be truncated if the corresponding commit subjects
+ * are too long.
+ */
+#define GIT_MAX_LABEL_LENGTH ((NAME_MAX) - (LOCK_SUFFIX_LEN) - 16)
 
 static const char sign_off_header[] = "Signed-off-by: ";
 static const char cherry_picked_prefix[] = "(cherry picked from commit ";
@@ -3705,12 +3709,11 @@ static int do_label(struct repository *r, const char *name, int len)
 	struct strbuf msg = STRBUF_INIT;
 	int ret = 0;
 	struct object_id head_oid;
-	int len_trunc = GIT_MIN(len, GIT_MAX_LABEL_LENGTH);
 
 	if (len == 1 && *name == '#')
 		return error(_("illegal label name: '%.*s'"), len, name);
 
-	strbuf_addf(&ref_name, "refs/rewritten/%.*s", len_trunc, name);
+	strbuf_addf(&ref_name, "refs/rewritten/%.*s", len, name);
 	strbuf_addf(&msg, "rebase (label) '%.*s'", len, name);
 
 	transaction = ref_store_transaction_begin(refs, &err);
@@ -3774,12 +3777,11 @@ static const char *reflog_message(struct replay_opts *opts,
 static struct commit *lookup_label(struct repository *r, const char *label,
 				   int len, struct strbuf *buf)
 {
-	int len_trunc = GIT_MIN(len, GIT_MAX_LABEL_LENGTH);
 	struct commit *commit;
 	struct object_id oid;
 
 	strbuf_reset(buf);
-	strbuf_addf(buf, "refs/rewritten/%.*s", len_trunc, label);
+	strbuf_addf(buf, "refs/rewritten/%.*s", len, label);
 	if (!read_ref(buf->buf, &oid)) {
 		commit = lookup_commit_object(r, &oid);
 	} else {
@@ -5402,6 +5404,8 @@ static const char *label_oid(struct object_id *oid, const char *label,
 		}
 	} else {
 		struct strbuf *buf = &state->buf;
+		int label_is_utf8 = 1; /* start with this assumption */
+		size_t max_len = buf->len + GIT_MAX_LABEL_LENGTH;
 
 		/*
 		 * Sanitize labels by replacing non-alpha-numeric characters
@@ -5410,14 +5414,32 @@ static const char *label_oid(struct object_id *oid, const char *label,
 		 *
 		 * Note that we retain non-ASCII UTF-8 characters (identified
 		 * via the most significant bit). They should be all acceptable
-		 * in file names. We do not validate the UTF-8 here, that's not
-		 * the job of this function.
+		 * in file names.
+		 *
+		 * As we will use the labels as names of (loose) refs, it is
+		 * vital that the name not be longer than the maximum component
+		 * size of the file system (`NAME_MAX`). We are careful to
+		 * truncate the label accordingly, allowing for the `.lock`
+		 * suffix and for the label to be UTF-8 encoded (i.e. we avoid
+		 * truncating in the middle of a character).
 		 */
-		for (; *label; label++)
-			if ((*label & 0x80) || isalnum(*label))
+		for (; *label && buf->len + 1 < max_len; label++)
+			if (isalnum(*label) ||
+			    (!label_is_utf8 && (*label & 0x80)))
 				strbuf_addch(buf, *label);
+			else if (*label & 0x80) {
+				const char *p = label;
+
+				utf8_width(&p, NULL);
+				if (p) {
+					strbuf_add(buf, label, p - label);
+					label = p - 1;
+				} else {
+					label_is_utf8 = 0;
+					strbuf_addch(buf, *label);
+				}
 			/* avoid leading dash and double-dashes */
-			else if (buf->len && buf->buf[buf->len - 1] != '-')
+			} else if (buf->len && buf->buf[buf->len - 1] != '-')
 				strbuf_addch(buf, '-');
 		if (!buf->len) {
 			strbuf_addstr(buf, "rev-");