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We describe an approach for optical label encoding that allows the realization of all-optical label-swapping in optical packet-switched networks. The proposed method is based on a combination of the amplitude-shift-keying (ASK) modulated payload with the differential phase-shift keying (DPSK) modulated label on the same optical carrier. We demonstrate an implementation using dual-wavelength injection locking (DWIL) of a Fabry-Perot laser diode. Bit-error-rate measurements were performed for the 10-Gb/s payload, and the 2.5-Gb/s label showed the feasibility of the proposed method. An all-optical buffer for the two-level ASK/DPSK optically labeled packets is also described. The buffer is implemented by routing the packet via a delay line if potential contention is predicted. Error-free operation was also achieved.