diff --git a/skimage/viewer/plugins/labelplugin.py b/skimage/viewer/plugins/labelplugin.py
index d224811c..b3c289f1 100644
--- a/skimage/viewer/plugins/labelplugin.py
+++ b/skimage/viewer/plugins/labelplugin.py
@@ -21,6 +21,7 @@ class LabelPainter(Plugin):
         self._radius_widget = Slider('radius', low=1, high=max_radius,
                                      value=5, value_type='int', ptype='plugin')
         labels = [str(i) for i in range(6)]
+        labels[0] = 'Erase'
         self._label_widget = ComboBox('label', labels, ptype='plugin')
         self.add_widget(self._radius_widget)
         self.add_widget(self._label_widget)
diff --git a/viewer_examples/plugins/watershed_demo.py b/viewer_examples/plugins/watershed_demo.py
index 7119b7f2..683e8a30 100644
--- a/viewer_examples/plugins/watershed_demo.py
+++ b/viewer_examples/plugins/watershed_demo.py
@@ -4,8 +4,17 @@ from skimage import data
 from skimage import filter
 from skimage import morphology
 from skimage.viewer import ImageViewer
+from skimage.viewer.widgets import history
 from skimage.viewer.plugins.labelplugin import LabelPainter
 
+class OKCancelButtons(history.OKCancelButtons):
+
+    def update_original_image(self):
+        # OKCancelButtons updates the original image with the filtered image
+        # by default. Override this method to update the overlay.
+        self.plugin._show_watershed()
+        self.plugin.close()
+
 
 class WatershedPlugin(LabelPainter):
 
@@ -13,19 +22,21 @@ class WatershedPlugin(LabelPainter):
         helpstr = ("Watershed plugin",
                    "----------------",
                    "Use mouse to paint each region with a different label.",
-                   "Press enter to display segmented image.")
+                   "Press OK to display segmented image.")
         return '\n'.join(helpstr)
 
-    def on_enter(self, overlay):
+    def _show_watershed(self):
         viewer = self.image_viewer
         edge_image = filter.sobel(viewer.image)
-        labels = morphology.watershed(edge_image, overlay)
+        labels = morphology.watershed(edge_image, self.paint_tool.overlay)
         viewer.ax.imshow(labels, cmap=plt.cm.jet, alpha=0.5)
         viewer.redraw()
-        self.close()
 
 
 image = data.coins()
+plugin = WatershedPlugin()
+plugin += OKCancelButtons()
+
 viewer = ImageViewer(image)
-viewer += WatershedPlugin()
+viewer += plugin
 viewer.show()