diff --git a/d2layouts/d2dagrelayout/layout.go b/d2layouts/d2dagrelayout/layout.go
index 3ae70e35a..68d8ec0f6 100644
--- a/d2layouts/d2dagrelayout/layout.go
+++ b/d2layouts/d2dagrelayout/layout.go
@@ -64,22 +64,35 @@ func Layout(ctx context.Context, g *d2graph.Graph) (err error) {
 	}
 
 	rootAttrs := dagreGraphAttrs{
-		ranksep: 100,
 		edgesep: 40,
 		nodesep: 60,
 	}
+	isHorizontal := false
 	switch g.Root.Attributes.Direction.Value {
 	case "down":
 		rootAttrs.rankdir = "TB"
 	case "right":
 		rootAttrs.rankdir = "LR"
+		isHorizontal = true
 	case "left":
 		rootAttrs.rankdir = "RL"
+		isHorizontal = true
 	case "up":
 		rootAttrs.rankdir = "BT"
 	default:
 		rootAttrs.rankdir = "TB"
 	}
+
+	maxLabelSize := 0
+	for _, edge := range g.Edges {
+		size := edge.LabelDimensions.Width
+		if !isHorizontal {
+			size = edge.LabelDimensions.Height
+		}
+		maxLabelSize = go2.Max(maxLabelSize, size)
+	}
+	rootAttrs.ranksep = go2.Max(100, maxLabelSize+40)
+
 	configJS := setGraphAttrs(rootAttrs)
 	if _, err := vm.RunString(configJS); err != nil {
 		return err