One of the most common questions I get from my clients is how to make labels from Outlook contacts. Here's the step by step (also available at my website http://www.jeffmeucci.com/). You might want to print this one out...it's a few steps.
Step One: In Microsoft Outlook contacts, first select the contacts you wish to mail merge. Once they are selected, click Tools->Mail Merge.
Step Two: Make sure the Mail Merge Contacts window is filled out (see below). For our example, we will make Mailing Labels as designated by the Document Type field.
Step Three: When Microsoft Word opens, click the Complete Setup option from the Mail Merge Helper dialogue. If you're not using the Mail Merge Helper, simply click OK on the gray dialogue box that appears.
Step Four: Click Setup in Section 1. In Label Options, choose the Avery 5160, the most common label size
(30 per page). Click OK. Click Close.
Step Five: On the Mail Merge toolbar, click the Insert Merge Field button.
Step Six: From the Insert Merge Field dialogue box, insert the fields that you would like to appear on your label. For this example, I clicked on Full Name, Company, and Mailing Address. When you get your fields onto the label, click Close.
Step Seven: Arrange the fields on the label so that the name field is on the top line, company name on second line, address on third etc. Once the first label is arranged, click the Propagate Labels button and the fields will copy to the other 29 labels.
Step Eight: Click Merge to New Document button. Click OK.
Step Nine: You're done! Save or Print your labels right from Word. Make sure to save the Merge Fields document in Word. You can use this template later and save yourself several steps.