Mounting evidence links diets high in ultra-processed foods (UPFs) with increased risk of obesity and other adverse health outcomes. In Australia, UPFs account for about 40% of total energy intake. As calls grow for front-of-pack labelling and other strategies to reduce UPF consumption, understanding public perceptions is critical to inform effective communication and policy design. We conducted 12 online focus groups with 112 Australian adults (49% women; 78% metropolitan) to explore (i) awareness, understanding, and recognition of UPFs, and (ii) views on labelling strategies to support healthier choices. Discussions covered food selection criteria, familiarity with ‘processed’ and ‘ultra-processed’ terminology, recognition of UPFs, and opinions on the current and desired availability of processing-level information. Images of packaged foods were used as stimuli. Data were examined using inductive thematic analysis. Two themes emerged: (i) concern but confusion around UPFs, and (ii) support for UPF information provision but uncertainty about feasibility. While many UPF characteristics were viewed negatively, most participants could not reliably identify UPFs, and few were familiar with the term. UPFs were often conflated with processed foods more broadly. Participants relied on packaging cues to inform perceived degree of processing, highlighting the need for transparent and salient labelling strategies. There was broad support for labelling strategies that could improve awareness and identification of UPFs, particularly if combined with public education. However, concerns were raised that co-locating UPF labels alongside existing health labels could be confusing when nutritional quality and level of processing are misaligned. Integrating UPF information into existing labelling systems was viewed as an acceptable solution. The findings can inform labelling strategies to reduce UPF consumption. Importantly, such strategies must be part of a broader, systems-focused policy response that addresses the upstream drivers of obesity and reshapes the food environment.