This paper proposes a probabilistic graphical model for the problem of propagating labels in video sequences, also termed the label propagation problem. Given a limited amount of hand labelled pixels, typically the start and end frames of a chunk of video, an EM based algorithm propagates labels through the rest of the frames of the video sequence. As a result, the user obtains pixelwise labelled video sequences along with the class probabilities at each pixel. Our novel algorithm provides an essential tool to reduce tedious hand labelling of video sequences, thus producing copious amounts of useable ground truth data. A novel application of this algorithm is in semi-supervised learning of discriminative classifiers for video segmentation and scene parsing. The label propagation scheme can be based on pixelwise correspondences obtained from motion estimation, image patch based similarities as seen in epitomic models or even the more recent, semantically consistent hierarchical region...