You can use the same fabric as the quilt or you can use any good cotton fabric to make a label. You will need to use a stabilizer under the fabric if you plan to do the lettering in the hoop. You may want to use a tear away or a wash away stabilizer - choice is up to you. If you have a very light weight stabilizer, you can double it up under the fabric. If you are just using the lettering function built into the machine, you can do it on just fabric but a light stabilizer under it might give you a better result. You might want to check out YouTube for videos of how to do this. Hope you post a picture when finished so we can see your great work!