diff --git a/d2layouts/d2elklayout/layout.go b/d2layouts/d2elklayout/layout.go
index eaadd520c..47904d6cc 100644
--- a/d2layouts/d2elklayout/layout.go
+++ b/d2layouts/d2elklayout/layout.go
@@ -16,6 +16,7 @@ import (
 	"oss.terrastruct.com/xdefer"
 
 	"oss.terrastruct.com/d2/d2graph"
+	"oss.terrastruct.com/d2/d2target"
 	"oss.terrastruct.com/d2/lib/geo"
 	"oss.terrastruct.com/d2/lib/go2"
 	"oss.terrastruct.com/d2/lib/label"
@@ -240,6 +241,8 @@ func Layout(ctx context.Context, g *d2graph.Graph) (err error) {
 		if obj.LabelWidth != nil && obj.LabelHeight != nil {
 			if len(obj.ChildrenArray) > 0 {
 				obj.LabelPosition = go2.Pointer(string(label.InsideTopCenter))
+			} else if obj.Attributes.Shape.Value == d2target.ShapeImage {
+				obj.LabelPosition = go2.Pointer(string(label.OutsideTopCenter))
 			} else {
 				obj.LabelPosition = go2.Pointer(string(label.InsideMiddleCenter))
 			}
diff --git a/e2etests/testdata/stable/images/elk/board.exp.json b/e2etests/testdata/stable/images/elk/board.exp.json
index af5875466..7f2141892 100644
--- a/e2etests/testdata/stable/images/elk/board.exp.json
+++ b/e2etests/testdata/stable/images/elk/board.exp.json
@@ -49,7 +49,7 @@
       "underline": false,
       "labelWidth": 13,
       "labelHeight": 26,
-      "labelPosition": "INSIDE_MIDDLE_CENTER"
+      "labelPosition": "OUTSIDE_TOP_CENTER"
     },
     {
       "id": "b",
@@ -99,7 +99,7 @@
       "underline": false,
       "labelWidth": 13,
       "labelHeight": 26,
-      "labelPosition": "INSIDE_MIDDLE_CENTER"
+      "labelPosition": "OUTSIDE_TOP_CENTER"
     }
   ],
   "connections": [
diff --git a/e2etests/testdata/stable/images/elk/sketch.exp.svg b/e2etests/testdata/stable/images/elk/sketch.exp.svg
index d0d315ec7..5a7febf5f 100644
--- a/e2etests/testdata/stable/images/elk/sketch.exp.svg
+++ b/e2etests/testdata/stable/images/elk/sketch.exp.svg
@@ -2,7 +2,7 @@
 <svg
 style="background: white;"
 xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"
-width="556" height="328" viewBox="-88 -88 556 328"><style type="text/css">
+width="556" height="359" viewBox="-88 -119 556 359"><style type="text/css">
 <![CDATA[
 .shape {
   shape-rendering: geometricPrecision;
@@ -14,7 +14,7 @@ width="556" height="328" viewBox="-88 -88 556 328"><style type="text/css">
 }
 
 ]]>
-</style><g class="shape" ><image href="https://icons.terrastruct.com/essentials/004-picture.svg" x="12" y="12" width="128" height="128" style="fill:#FFFFFF;stroke:#0D32B2;opacity:1.000000;stroke-width:2;" /></g><text class="text-bold" x="76.000000" y="79.000000" style="text-anchor:middle;font-size:16px;fill:black">a</text><g class="shape" ><image href="https://icons.terrastruct.com/essentials/004-picture.svg" x="240" y="12" width="128" height="128" style="fill:#FFFFFF;stroke:#0D32B2;opacity:1.000000;stroke-width:2;" /></g><text class="text-bold" x="304.000000" y="79.000000" style="text-anchor:middle;font-size:16px;fill:black">b</text><marker id="mk-3990223579" markerWidth="10.000000" markerHeight="12.000000" refX="7.000000" refY="6.000000" viewBox="0.000000 0.000000 10.000000 12.000000" orient="auto" markerUnits="userSpaceOnUse"> <polygon class="connection" fill="#0D32B2" stroke-width="2" points="0.000000,0.000000 10.000000,6.000000 0.000000,12.000000" /> </marker><path d="M 142.000000 76.000000 L 236.000000 76.000000" class="connection" style="fill:none;stroke:#0D32B2;opacity:1.000000;stroke-width:2;" marker-end="url(#mk-3990223579)" /><style type="text/css"><![CDATA[
+</style><g class="shape" ><image href="https://icons.terrastruct.com/essentials/004-picture.svg" x="12" y="12" width="128" height="128" style="fill:#FFFFFF;stroke:#0D32B2;opacity:1.000000;stroke-width:2;" /></g><text class="text-bold" x="76.000000" y="-3.000000" style="text-anchor:middle;font-size:16px;fill:black">a</text><g class="shape" ><image href="https://icons.terrastruct.com/essentials/004-picture.svg" x="240" y="12" width="128" height="128" style="fill:#FFFFFF;stroke:#0D32B2;opacity:1.000000;stroke-width:2;" /></g><text class="text-bold" x="304.000000" y="-3.000000" style="text-anchor:middle;font-size:16px;fill:black">b</text><marker id="mk-3990223579" markerWidth="10.000000" markerHeight="12.000000" refX="7.000000" refY="6.000000" viewBox="0.000000 0.000000 10.000000 12.000000" orient="auto" markerUnits="userSpaceOnUse"> <polygon class="connection" fill="#0D32B2" stroke-width="2" points="0.000000,0.000000 10.000000,6.000000 0.000000,12.000000" /> </marker><path d="M 142.000000 76.000000 L 236.000000 76.000000" class="connection" style="fill:none;stroke:#0D32B2;opacity:1.000000;stroke-width:2;" marker-end="url(#mk-3990223579)" /><style type="text/css"><![CDATA[
 .text-bold {
 	font-family: "font-bold";
 }