@@ -2475,7 +2475,7 @@ def pie(self, x, explode=None, labels=None, colors=None,
             autopct=None, pctdistance=0.6, shadow=False, labeldistance=1.1,
             startangle=None, radius=None, counterclock=True,
             wedgeprops=None, textprops=None, center=(0, 0),
-            frame=False, labelrotate=False):
+            frame=False, rotatelabels=False):
         r"""
         Plot a pie chart.
 
@@ -2542,7 +2542,7 @@ def pie(self, x, explode=None, labels=None, colors=None,
           *frame*: [ *False* | *True* ]
             Plot axes frame with the chart.
 
-          *labelrotate*: [ *False* | *True* ]
+          *rotatelabels*: [ *False* | *True* ]
             Rotate each label to the angle of the corresponding slice.
 
         The pie chart will probably look best if the figure and axes are
@@ -2620,7 +2620,6 @@ def get_next_color():
             x, y = center
             theta2 = (theta1 + frac) if counterclock else (theta1 - frac)
             thetam = 2 * math.pi * 0.5 * (theta1 + theta2)
-            thetamd = 360 * 0.5 * (theta1 + theta2)
             x += expl * math.cos(thetam)
             y += expl * math.sin(thetam)
 
@@ -2643,15 +2642,17 @@ def get_next_color():
 
             xt = x + labeldistance * radius * math.cos(thetam)
             yt = y + labeldistance * radius * math.sin(thetam)
-            label_alignment = xt > 0 and 'left' or 'right'
+            label_alignment_h = xt > 0 and 'left' or 'right'
+            label_alignment_v = 'center'
             label_rotation = 'horizontal'
-            if labelrotate:
-                label_rotation = thetamd + (0 if xt > 0 else 180)
+            if rotatelabels:
+                label_alignment_v = yt > 0 and 'bottom' or 'top'
+                label_rotation = np.rad2deg(thetam) + (0 if xt > 0 else 180)
 
             t = self.text(xt, yt, label,
                           size=rcParams['xtick.labelsize'],
-                          horizontalalignment=label_alignment,
-                          verticalalignment='center',
+                          horizontalalignment=label_alignment_h,
+                          verticalalignment=label_alignment_v,
                           rotation=label_rotation,
                           **textprops)
 
 
@@ -3208,7 +3208,7 @@ def phase_spectrum(x, Fs=None, Fc=None, window=None, pad_to=None, sides=None,
 def pie(x, explode=None, labels=None, colors=None, autopct=None,
         pctdistance=0.6, shadow=False, labeldistance=1.1, startangle=None,
         radius=None, counterclock=True, wedgeprops=None, textprops=None,
-        center=(0, 0), frame=False, labelrotate=False, hold=None, data=None):
+        center=(0, 0), frame=False, rotatelabels=False, hold=None, data=None):
     ax = gca()
     # Deprecated: allow callers to override the hold state
     # by passing hold=True|False
@@ -3225,7 +3225,7 @@ def pie(x, explode=None, labels=None, colors=None, autopct=None,
                      labeldistance=labeldistance, startangle=startangle,
                      radius=radius, counterclock=counterclock,
                      wedgeprops=wedgeprops, textprops=textprops, center=center,
-                     frame=frame, labelrotate=labelrotate, data=data)
+                     frame=frame, rotatelabels=rotatelabels, data=data)
     finally:
         ax._hold = washold
 
 
@@ -4242,17 +4242,17 @@ def test_pie_frame_grid():
     plt.axis('equal')
 
 
-@image_comparison(baseline_images=['pie_labelrotate_true'], extensions=['png'])
-def test_pie_labelrotate_true():
+@image_comparison(baseline_images=['pie_rotatelabels_true'], extensions=['png'])
+def test_pie_rotatelabels_true():
     # The slices will be ordered and plotted counter-clockwise.
-    labels = 'Frogs', 'Hogs', 'Dogs', 'Logs'
+    labels = 'Hogwarts', 'Frogs', 'Dogs', 'Logs'
     sizes = [15, 30, 45, 10]
     colors = ['yellowgreen', 'gold', 'lightskyblue', 'lightcoral']
     explode = (0, 0.1, 0, 0)  # only "explode" the 2nd slice (i.e. 'Hogs')
 
     plt.pie(sizes, explode=explode, labels=labels, colors=colors,
             autopct='%1.1f%%', shadow=True, startangle=90,
-            labelrotate=True)
+            rotatelabels=True)
     # Set aspect ratio to be equal so that pie is drawn as a circle.
     plt.axis('equal')