diff --git a/src/main.ps1 b/src/main.ps1
index 83ad38a..dbe4868 100644
--- a/src/main.ps1
+++ b/src/main.ps1
@@ -196,8 +196,8 @@ $settings = [pscustomobject]@{
             MajorLabels              = $settings.Publish.Module.MajorLabels ?? 'major, breaking'
             MinorLabels              = $settings.Publish.Module.MinorLabels ?? 'minor, feature'
             PatchLabels              = $settings.Publish.Module.PatchLabels ?? 'patch, fix'
+            PrereleaseLabels         = $settings.Publish.Module.PrereleaseLabels ?? 'Prerelease'
             IgnoreLabels             = $settings.Publish.Module.IgnoreLabels ?? 'NoRelease'
-            PrereleaseLabels         = $settings.Publish.Module.PrereleaseLabels ?? 'prerelease'
             UsePRTitleAsReleaseName  = $settings.Publish.Module.UsePRTitleAsReleaseName ?? $false
             UsePRBodyAsReleaseNotes  = $settings.Publish.Module.UsePRBodyAsReleaseNotes ?? $true
             UsePRTitleAsNotesHeading = $settings.Publish.Module.UsePRTitleAsNotesHeading ?? $true
@@ -249,10 +249,6 @@ LogGroup 'Calculate Job Run Conditions:' {
     $isMergedPR = $isPR -and $pullRequestAction -eq 'closed' -and $pullRequestIsMerged -eq $true
     $isNotAbandonedPR = -not $isAbandonedPR
 
-    # Check if a prerelease label exists on the PR
-    $prereleaseLabels = $settings.Publish.Module.PrereleaseLabels -split ',' | ForEach-Object { $_.Trim() }
-    $prLabels = @($pullRequest.labels.name)
-    $hasPrereleaseLabel = ($prLabels | Where-Object { $prereleaseLabels -contains $_ }).Count -gt 0
     $isOpenOrLabeledPR = $isPR -and $pullRequestAction -in @('opened', 'reopened', 'synchronize', 'labeled')
 
     # Check if important files have changed in the PR
@@ -338,9 +334,17 @@ If you believe this is incorrect, please verify that your changes are in the cor
         Write-Host 'Not a PR event or missing PR number - treating as having important changes'
     }
 
-    # Prerelease requires both: prerelease label AND important file changes
-    # No point creating a prerelease if only non-module files changed
-    $shouldPrerelease = $isOpenOrLabeledPR -and $hasPrereleaseLabel -and $hasImportantChanges
+    # Evaluate PR labels against configured label lists
+    $prLabels = @($pullRequest.Labels | ForEach-Object { $_.Name })
+    $prereleaseLabels = ($settings.Publish.Module.PrereleaseLabels -split ',') | ForEach-Object { $_.Trim() } | Where-Object { $_ }
+    $ignoreLabels = ($settings.Publish.Module.IgnoreLabels -split ',') | ForEach-Object { $_.Trim() } | Where-Object { $_ }
+
+    $hasPrereleaseLabel = ($prLabels | Where-Object { $prereleaseLabels -contains $_ }).Count -gt 0
+    $hasIgnoreLabel = ($prLabels | Where-Object { $ignoreLabels -contains $_ }).Count -gt 0
+
+    # Prerelease: open PR with the Prerelease label, important changes, and not opted out via ignore label.
+    # Version level (patch/minor/major) is determined by Resolve-PSModuleVersion based on version bump labels and AutoPatching.
+    $shouldPrerelease = $isOpenOrLabeledPR -and $hasPrereleaseLabel -and $hasImportantChanges -and -not $hasIgnoreLabel
 
     # Determine ReleaseType - what type of release to create
     # Values: 'Release', 'Prerelease', 'None'
@@ -363,6 +367,7 @@ If you believe this is incorrect, please verify that your changes are in the cor
         isNotAbandonedPR      = $isNotAbandonedPR
         isTargetDefaultBranch = $isTargetDefaultBranch
         hasPrereleaseLabel    = $hasPrereleaseLabel
+        hasIgnoreLabel        = $hasIgnoreLabel
         shouldPrerelease      = $shouldPrerelease
         ReleaseType           = $releaseType
         HasImportantChanges   = $hasImportantChanges
@@ -561,7 +566,7 @@ LogGroup 'Calculate Job Run Conditions:' {
     # Check if setup/teardown scripts exist in the repository
     $hasBeforeAllScript = Test-Path -Path 'tests/BeforeAll.ps1'
     $hasAfterAllScript = Test-Path -Path 'tests/AfterAll.ps1'
-    Write-Host "Setup/teardown script detection:"
+    Write-Host 'Setup/teardown script detection:'
     Write-Host "  tests/BeforeAll.ps1 exists: $hasBeforeAllScript"
     Write-Host "  tests/AfterAll.ps1 exists:  $hasAfterAllScript"