Many computer vision applications, such as scene analysis and medical image interpretation, are ill-suited for traditional classification where each image can only be associated with a single class. This has stimulated recent work in multi-label learning where a given image can be tagged with multiple class labels. A serious problem with existing approaches is that they are unable to exploit correlations between class labels. This paper presents a novel framework for multi-label learning termed Correlated Label Propagation (CLP) that explicitly models interactions between labels in an efficient manner. As in standard label propagation, labels attached to training data points are propagated to test data points; however, unlike standard algorithms that treat each label independently, CLP simultaneously co-propagates multiple labels. Existing work eschews such an approach since naive algorithms for label co-propagation are intractable. We present an algorithm based on properties of submodular functions that efficiently finds an optimal solution. Our experiments demonstrate that CLP leads to significant gains in precision/recall against standard techniques on two real-world computer vision tasks involving several hundred labels.