With the cursor in the first label on the sheet, select Pictures from the
Insert menu and then select from File and select the picture that you want
as the back ground. Then select the picture in that label and from the
Format menu, select Picture and on the Layout tab of the Format Picture
dialog, select Behind text and on the Picture tab, select Washout from the
Image control. You manually adjust the degree of washout by using the
Brightness and Contrast controls. Then, when you have the merge fields set
up in that label, click on the Propogate Labels button on the Mailmerge
toolbar to replicate the layout to each label on the sheet.

I probably should have started by advising you to turn on the Mailmerge
toolbar by selecting Toolbars from the View menu and checking that item.

--
Hope this helps.

Please reply to the newsgroup unless you wish to avail yourself of my
services on a paid consulting basis.

Doug Robbins - Word MVP

"Keren_In_NC" wrote in message
...
Hi:
Using Word 2003
I am printing labels with mail merge data, and wish to have each label
have
a picture as a background. I have tried Format-Background-Watermark and
Format-Background-Fill Effects, choosing a picture each time, but it
applies
the picture as a background to all the labels (whole document). I want
the
whole picture as a background on each label.

Thanks for any help, Keren