The subject of the study. The article scientifically substantiates approaches to the formation,development and effective use of labor potential. The author considered the key theoretical aspects ofthe essence, typology and features of the formation of labor potential. The purpose of the study. Theoretical approaches to the interpretation of labor potential asan economic category are considered. Determining the essence of the economic category «labourpotential», we will conduct research in three main directions: according to a set of qualitative indicators,according to a set of quantitative indicators and as a complex socio–economic category.Work results. Based on the evidence, the economic essence of the term «potential» is defined asthe totality of all available means, productive power, reserves and stocks that are used in the present,their development and acquisition in the future, which can be used in the activity of a given subject ofentrepreneurial activity and which, under different conditions, affect the efficiency of this business entity.Conclusions. Taking into account the peculiarities of the formation of labor potential, the category«labor potential» is characterized in three dimensions of time: past, present and future. It is defined that«labor potential» is the ability of the economically active population to work, determined by a combinationof both its quantitative and qualitative characteristics, which are realized in the provision of high–qualitysocially useful work and are manifested in abilities, expertise, skills, competences and other humanqualities, which are necessary for the performance of various functions and tasks, meeting public needs