Recently, there has been research to use portable digital camera to recognize objects in natural scene images, including labels or marks on a cylindrical surface. In many cases, text or logo in a label can be distorted by a structural movement of the object on which the label resides. Since the distortion in the label can degrade the performance of object recognition, the label should be rectified or restored from deformations. In this paper, a new method for label detection and restoration in digital images is presented. In the detection phase, the Hough transform is employed to detect two vertical boundaries of the label, and a horizontal edge profile is analyzed to detect upper-side and lower-side boundaries of the label. Then, the biquadratic transformation is used to restore the rectangular shape of the label. The proposed algorithm performs restoration of 3D objects in a 2D space, and it requires neither an auxiliary hardware such as 3D camera to construct 3D models nor a multi-camera to capture objects in different views. Experimental results demonstrate the effectiveness of the proposed method.