diff --git a/chaco/tools/data_label_tool.py b/chaco/tools/data_label_tool.py
index 2579ee6e5..06fc19419 100644
--- a/chaco/tools/data_label_tool.py
+++ b/chaco/tools/data_label_tool.py
@@ -71,7 +71,7 @@ def drag_start(self, event):
         """
         if self.component:
             label = self.component
-            pointx, pointy = label.component.map_screen(label.data_point)
+            pointx, pointy = label.component.map_screen(label.data_point)[0]
             self._original_offset = (label.x - pointx, label.y - pointy)
             event.window.set_mouse_owner(self, event.net_transform())
             event.handled = True
diff --git a/chaco/tools/tests/test_data_label_tool.py b/chaco/tools/tests/test_data_label_tool.py
new file mode 100644
index 000000000..c4deabb85
--- /dev/null
+++ b/chaco/tools/tests/test_data_label_tool.py
@@ -0,0 +1,86 @@
+import unittest
+
+import numpy as np
+
+from enable.api import ComponentEditor
+from enable.testing import EnableTestAssistant
+from traits.api import HasTraits, Instance
+from traitsui.api import Item, View
+
+from chaco.api import ArrayPlotData, DataLabel, Plot
+from chaco.tools.api import DataLabelTool
+
+IMAGE = np.random.random_integers(0, 255, size=(100, 200)).astype(np.uint8)
+RGB = np.dstack([IMAGE] * 3)
+
+
+class TestDataLabelTool(unittest.TestCase, EnableTestAssistant):
+
+    # regression test for enthought/chaco#550
+    def test_use_with_2d_plot(self):
+        class Test2DPlot(HasTraits):
+            plot = Instance(Plot)
+
+            traits_view = View(
+                Item('plot', editor=ComponentEditor(), show_label=False),
+                width=500,
+                height=500,
+                resizable=True
+            )
+
+            def _plot_default(self):
+                pd = ArrayPlotData(image=RGB)
+                plot = Plot(pd)
+                self.renderer = plot.img_plot('image')[0]
+
+                label = DataLabel(
+                    component=self.renderer,
+                    data_point=(25, 12)
+                )
+                plot.overlays.append(label)
+                tool = DataLabelTool(label)
+                label.tools.append(tool)
+                return plot
+
+        test_2d_plot = Test2DPlot()
+        # should not fail
+        self.press_move_release(
+            test_2d_plot.plot,
+            [(0, 0), (200, 200), (300, 300)],
+        )
+
+    def test_use_with_xy_plot(self):
+        class TestXYPlot(HasTraits):
+            plot = Instance(Plot)
+
+            traits_view = View(
+                Item('plot', editor=ComponentEditor(), show_label=False),
+                width=500,
+                height=500,
+                resizable=True
+            )
+
+            def _plot_default(self):
+                values = np.arange(10)
+                plotdata = ArrayPlotData(x=values, y=values)
+
+                plot = Plot(plotdata)
+                self.renderer = plot.plot(
+                    ("x", "y"), type="line", color="blue"
+                )[0]
+
+                label = DataLabel(
+                    component=self.renderer,
+                    data_point=(5, 5)
+                )
+                plot.overlays.append(label)
+                tool = DataLabelTool(label)
+                label.tools.append(tool)
+                return plot
+
+        test_xy_plot = TestXYPlot()
+        # should not fail
+        self.press_move_release(
+            test_xy_plot.plot,
+            [(0, 0), (200, 200), (300, 300)],
+        )