diff --git a/doc/changes/devel/12703.newfeature.rst b/doc/changes/devel/12703.newfeature.rst
new file mode 100644
index 00000000000..0c6afa4468b
--- /dev/null
+++ b/doc/changes/devel/12703.newfeature.rst
@@ -0,0 +1 @@
+Montage plots created with :meth:`~mne.channels.DigMontage.plot` now scale both the channel dots *and* channel names with the new ``scale`` parameter. The default is ``scale=1`` (factors less than 1 will scale down, whereas factors greater than 1 will scale up). The previous ``scale_factor`` parameter only affected marker size, and this parameter is now deprecated. By `Clemens Brunner`_.
\ No newline at end of file
diff --git a/mne/channels/montage.py b/mne/channels/montage.py
index ea6d7ba92be..8ebbce0cfc0 100644
--- a/mne/channels/montage.py
+++ b/mne/channels/montage.py
@@ -369,17 +369,19 @@ def __repr__(self):
     @copy_function_doc_to_method_doc(plot_montage)
     def plot(
         self,
-        scale_factor=20,
+        *,
+        scale=None,
+        scale_factor=None,
         show_names=True,
         kind="topomap",
         show=True,
         sphere=None,
-        *,
         axes=None,
         verbose=None,
     ):
         return plot_montage(
             self,
+            scale=scale,
             scale_factor=scale_factor,
             show_names=show_names,
             kind=kind,
diff --git a/mne/viz/montage.py b/mne/viz/montage.py
index 935a306e0d9..4e45ac0a513 100644
--- a/mne/viz/montage.py
+++ b/mne/viz/montage.py
@@ -16,12 +16,13 @@
 @verbose
 def plot_montage(
     montage,
-    scale_factor=20,
+    *,
+    scale=None,
+    scale_factor=None,
     show_names=True,
     kind="topomap",
     show=True,
     sphere=None,
-    *,
     axes=None,
     verbose=None,
 ):
@@ -31,8 +32,11 @@ def plot_montage(
     ----------
     montage : instance of DigMontage
         The montage to visualize.
+    scale : float
+        Determines the scale of the channel points and labels; values < 1 will scale
+        down, whereas values > 1 will scale up. Default to None, which implies 1.
     scale_factor : float
-        Determines the size of the points.
+        Determines the size of the points. Deprecated, use scale instead.
     show_names : bool | list
         Whether to display all channel names. If a list, only the channel
         names in the list are shown. Defaults to True.
@@ -51,8 +55,20 @@ def plot_montage(
     fig : instance of matplotlib.figure.Figure
         The figure object.
     """
+    import matplotlib.pyplot as plt
+
     from ..channels import DigMontage, make_dig_montage
 
+    if scale_factor is not None:
+        msg = "scale_factor has been deprecated and will be removed. Use scale instead."
+        if scale is not None:
+            raise ValueError(
+                " ".join(["scale and scale_factor cannot be used together.", msg])
+            )
+        logger.info(msg)
+    if scale is None:
+        scale = 1
+
     _check_option("kind", kind, ["topomap", "3d"])
     _validate_type(montage, DigMontage, item_name="montage")
     ch_names = montage.ch_names
@@ -93,6 +109,25 @@ def plot_montage(
         sphere=sphere,
         axes=axes,
     )
-    collection = fig.axes[0].collections[0]
-    collection.set_sizes([scale_factor])
+
+    if scale_factor is not None:
+        # scale points
+        collection = fig.axes[0].collections[0]
+        collection.set_sizes([scale_factor])
+    elif scale is not None:
+        # scale points
+        collection = fig.axes[0].collections[0]
+        collection.set_sizes([scale * 10])
+
+        # scale labels
+        labels = fig.findobj(match=plt.Text)
+        x_label, y_label = fig.axes[0].xaxis.label, fig.axes[0].yaxis.label
+        z_label = fig.axes[0].zaxis.label if kind == "3d" else None
+        tick_labels = fig.axes[0].get_xticklabels() + fig.axes[0].get_yticklabels()
+        if kind == "3d":
+            tick_labels += fig.axes[0].get_zticklabels()
+        for label in labels:
+            if label not in [x_label, y_label, z_label] + tick_labels:
+                label.set_fontsize(label.get_fontsize() * scale)
+
     return fig