diff --git a/docs/resources/changelog.md b/docs/resources/changelog.md
index 93992c39..2e94405c 100644
--- a/docs/resources/changelog.md
+++ b/docs/resources/changelog.md
@@ -6,6 +6,12 @@ Components with the <sl-badge variant="warning" pill>Experimental</sl-badge> bad
 
 _During the beta period, these restrictions may be relaxed in the event of a mission-critical bug._ 🐛
 
+## Next
+
+- Added `sl-label-change` event to `<sl-menu-item>`
+- Fixed a bug where updating a menu item's label wouldn't update the display label in `<sl-select>` [#729](https://github.com/shoelace-style/shoelace/issues/729)
+- Improved performance of `<sl-select>` by caching menu items instead of traversing for them each time
+
 ## 2.0.0-beta.73
 
 - Added `button` part to `<sl-radio-button>`
diff --git a/src/components/menu-item/menu-item.ts b/src/components/menu-item/menu-item.ts
index 8ae68dbd..2f100459 100644
--- a/src/components/menu-item/menu-item.ts
+++ b/src/components/menu-item/menu-item.ts
@@ -2,6 +2,8 @@ import { html, LitElement } from 'lit';
 import { customElement, property, query } from 'lit/decorators.js';
 import { classMap } from 'lit/directives/class-map.js';
 import '../../components/icon/icon';
+import { emit } from '../../internal/event';
+import { getTextContent } from '../../internal/slot';
 import { watch } from '../../internal/watch';
 import styles from './menu-item.styles';
 
@@ -11,6 +13,9 @@ import styles from './menu-item.styles';
  *
  * @dependency sl-icon
  *
+ * @event sl-label-change - Emitted when the menu item's text label changes. For performance reasons, this event is only
+ *   emitted if the default slot's `slotchange` event is triggered. It will not fire when the label is first set.
+ *
  * @slot - The menu item's label.
  * @slot prefix - Used to prepend an icon or similar element to the menu item.
  * @slot suffix - Used to append an icon or similar element to the menu item.
@@ -24,6 +29,9 @@ import styles from './menu-item.styles';
 export default class SlMenuItem extends LitElement {
   static styles = styles;
 
+  private cachedTextLabel: string;
+
+  @query('slot:not([name])') defaultSlot: HTMLSlotElement;
   @query('.menu-item') menuItem: HTMLElement;
 
   /** Draws the item in a checked state. */
@@ -39,6 +47,11 @@ export default class SlMenuItem extends LitElement {
     this.setAttribute('role', 'menuitem');
   }
 
+  /** Returns a text label based on the contents of the menu item's default slot. */
+  getTextLabel() {
+    return getTextContent(this.defaultSlot);
+  }
+
   @watch('checked')
   handleCheckedChange() {
     this.setAttribute('aria-checked', this.checked ? 'true' : 'false');
@@ -49,6 +62,21 @@ export default class SlMenuItem extends LitElement {
     this.setAttribute('aria-disabled', this.disabled ? 'true' : 'false');
   }
 
+  handleDefaultSlotChange() {
+    const textLabel = this.getTextLabel();
+
+    // Ignore the first time the label is set
+    if (typeof this.cachedTextLabel === 'undefined') {
+      this.cachedTextLabel = textLabel;
+      return;
+    }
+
+    if (textLabel !== this.cachedTextLabel) {
+      this.cachedTextLabel = textLabel;
+      emit(this, 'sl-label-change');
+    }
+  }
+
   render() {
     return html`
       <div
@@ -69,7 +97,7 @@ export default class SlMenuItem extends LitElement {
         </span>
 
         <span part="label" class="menu-item__label">
-          <slot></slot>
+          <slot @slotchange=${this.handleDefaultSlotChange}></slot>
         </span>
 
         <span part="suffix" class="menu-item__suffix">
diff --git a/src/components/select/select.test.ts b/src/components/select/select.test.ts
index 7db7956b..8a8f26c2 100644
--- a/src/components/select/select.test.ts
+++ b/src/components/select/select.test.ts
@@ -1,4 +1,4 @@
-import { expect, fixture, html, waitUntil } from '@open-wc/testing';
+import { expect, fixture, html, oneEvent, waitUntil } from '@open-wc/testing';
 import { sendKeys } from '@web/test-runner-commands';
 import sinon from 'sinon';
 import type SlSelect from './select';
@@ -110,4 +110,24 @@ describe('<sl-select>', () => {
 
     expect(select.shadowRoot!.activeElement).to.equal(select.control);
   });
+
+  it('should update the display label when a menu item changes', async () => {
+    const el = await fixture<SlSelect>(html`
+      <sl-select value="option-1">
+        <sl-menu-item value="option-1">Option 1</sl-menu-item>
+        <sl-menu-item value="option-2">Option 2</sl-menu-item>
+        <sl-menu-item value="option-3">Option 3</sl-menu-item>
+      </sl-select>
+    `);
+    const displayLabel = el.shadowRoot!.querySelector('[part="display-label"]')!;
+    const menuItem = el.querySelector('sl-menu-item')!;
+
+    expect(displayLabel.textContent?.trim()).to.equal('Option 1');
+    menuItem.textContent = 'updated';
+
+    await oneEvent(el, 'sl-label-change');
+    await el.updateComplete;
+
+    expect(displayLabel.textContent?.trim()).to.equal('updated');
+  });
 });
diff --git a/src/components/select/select.ts b/src/components/select/select.ts
index 56d7736e..114c6e31 100644
--- a/src/components/select/select.ts
+++ b/src/components/select/select.ts
@@ -8,7 +8,7 @@ import '../../components/menu/menu';
 import '../../components/tag/tag';
 import { emit } from '../../internal/event';
 import { FormSubmitController } from '../../internal/form';
-import { getTextContent, HasSlotController } from '../../internal/slot';
+import { HasSlotController } from '../../internal/slot';
 import { watch } from '../../internal/watch';
 import { LocalizeController } from '../../utilities/localize';
 import styles from './select.styles';
@@ -72,6 +72,7 @@ export default class SlSelect extends LitElement {
   private readonly formSubmitController = new FormSubmitController(this);
   private readonly hasSlotController = new HasSlotController(this, 'help-text', 'label');
   private readonly localize = new LocalizeController(this);
+  private menuItems: SlMenuItem[] = [];
   private resizeObserver: ResizeObserver;
 
   @state() private hasFocus = false;
@@ -166,15 +167,6 @@ export default class SlSelect extends LitElement {
     this.invalid = !this.input.checkValidity();
   }
 
-  getItemLabel(item: SlMenuItem) {
-    const slot = item.shadowRoot!.querySelector<HTMLSlotElement>('slot:not([name])');
-    return getTextContent(slot);
-  }
-
-  getItems() {
-    return [...this.querySelectorAll<SlMenuItem>('sl-menu-item')];
-  }
-
   getValueAsArray() {
     // Single selects use '' as an empty selection value, so convert this to [] for an empty multi select
     if (this.multiple && this.value === '') {
@@ -229,9 +221,8 @@ export default class SlSelect extends LitElement {
 
   handleKeyDown(event: KeyboardEvent) {
     const target = event.target as HTMLElement;
-    const items = this.getItems();
-    const firstItem = items[0];
-    const lastItem = items[items.length - 1];
+    const firstItem = this.menuItems[0];
+    const lastItem = this.menuItems[this.menuItems.length - 1];
 
     // Ignore key presses on tags
     if (target.tagName.toLowerCase() === 'sl-tag') {
@@ -313,6 +304,14 @@ export default class SlSelect extends LitElement {
     this.control.focus();
   }
 
+  handleMenuItemLabelChange() {
+    // Update the display label when checked menu item's label changes
+    if (!this.multiple) {
+      const checkedItem = this.menuItems.find(item => item.value === this.value);
+      this.displayLabel = checkedItem ? checkedItem.getTextLabel() : '';
+    }
+  }
+
   @watch('multiple')
   handleMultipleChange() {
     // Cast to array | string based on `this.multiple`
@@ -323,11 +322,11 @@ export default class SlSelect extends LitElement {
 
   async handleMenuSlotChange() {
     // Wait for items to render before gathering labels otherwise the slot won't exist
-    const items = this.getItems();
+    this.menuItems = [...this.querySelectorAll<SlMenuItem>('sl-menu-item')];
 
     // Check for duplicate values in menu items
     const values: string[] = [];
-    items.forEach(item => {
+    this.menuItems.forEach(item => {
       if (values.includes(item.value)) {
         console.error(`Duplicate value found in <sl-select> menu item: '${item.value}'`, item);
       }
@@ -335,7 +334,8 @@ export default class SlSelect extends LitElement {
       values.push(item.value);
     });
 
-    await Promise.all(items.map(item => item.render)).then(() => this.syncItemsFromValue());
+    await Promise.all(this.menuItems.map(item => item.render));
+    this.syncItemsFromValue();
   }
 
   handleTagInteraction(event: KeyboardEvent | MouseEvent) {
@@ -364,22 +364,20 @@ export default class SlSelect extends LitElement {
 
   resizeMenu() {
     this.menu.style.width = `${this.control.clientWidth}px`;
-
     this.dropdown.reposition();
   }
 
   syncItemsFromValue() {
-    const items = this.getItems();
     const value = this.getValueAsArray();
 
     // Sync checked states
-    items.map(item => (item.checked = value.includes(item.value)));
+    this.menuItems.map(item => (item.checked = value.includes(item.value)));
 
     // Sync display label and tags
     if (this.multiple) {
-      const checkedItems = items.filter(item => value.includes(item.value));
+      const checkedItems = this.menuItems.filter(item => value.includes(item.value));
 
-      this.displayLabel = checkedItems.length > 0 ? this.getItemLabel(checkedItems[0]) : '';
+      this.displayLabel = checkedItems.length > 0 ? checkedItems[0].getTextLabel() : '';
       this.displayTags = checkedItems.map((item: SlMenuItem) => {
         return html`
           <sl-tag
@@ -403,7 +401,7 @@ export default class SlSelect extends LitElement {
               }
             }}
           >
-            ${this.getItemLabel(item)}
+            ${item.getTextLabel()}
           </sl-tag>
         `;
       });
@@ -428,16 +426,15 @@ export default class SlSelect extends LitElement {
         `);
       }
     } else {
-      const checkedItem = items.find(item => item.value === value[0]);
+      const checkedItem = this.menuItems.find(item => item.value === value[0]);
 
-      this.displayLabel = checkedItem ? this.getItemLabel(checkedItem) : '';
+      this.displayLabel = checkedItem ? checkedItem.getTextLabel() : '';
       this.displayTags = [];
     }
   }
 
   syncValueFromItems() {
-    const items = this.getItems();
-    const checkedItems = items.filter(item => item.checked);
+    const checkedItems = this.menuItems.filter(item => item.checked);
     const checkedValues = checkedItems.map(item => item.value);
 
     if (this.multiple) {
@@ -571,7 +568,7 @@ export default class SlSelect extends LitElement {
             </div>
 
             <sl-menu part="menu" id="menu" class="select__menu" @sl-select=${this.handleMenuSelect}>
-              <slot @slotchange=${this.handleMenuSlotChange}></slot>
+              <slot @slotchange=${this.handleMenuSlotChange} @sl-label-change=${this.handleMenuItemLabelChange}></slot>
             </sl-menu>
           </sl-dropdown>
         </div>