We present an efficient run-based two-scan algorithm for labeling connected components in a binary image. Unlike conventional label-equivalence-based algorithms, which resolve label equivalences between provisional labels, our algorithm resolves label equivalences between provisional label sets. At any time, all provisional labels that are assigned to a connected component are combined in a set, and the smallest label is used as the representative label. The corresponding relation of a provisional label and its representative label is recorded in a table. Whenever different connected components are found to be connected, all provisional label sets concerned with these connected components are merged together, and the smallest provisional label is taken as the representative label. When the first scan is finished, all provisional labels that were assigned to each connected component in the given image will have a unique representative label. During the second scan, we need only to replace each provisional label by its representative label. Experimental results on various types of images demonstrate that our algorithm outperforms all conventional labeling algorithms.