diff --git a/doc/whats-new.rst b/doc/whats-new.rst
index 40e206aaa86..0457b77f20c 100644
--- a/doc/whats-new.rst
+++ b/doc/whats-new.rst
@@ -40,6 +40,10 @@ Enhancements
 Bug fixes
 ~~~~~~~~~
 
+- Fixed labeled indexing with slice bounds given by xarray objects with
+  datetime64 or timedelta64 dtypes (:issue:`1240`).
+  By `Stephan Hoyer <https://github.com/shoyer>`_.
+
 .. _whats-new.0.10.2:
 
 v0.10.2 (13 March 2018)
diff --git a/xarray/core/indexing.py b/xarray/core/indexing.py
index f7477a3e6b2..2c1f08379ab 100644
--- a/xarray/core/indexing.py
+++ b/xarray/core/indexing.py
@@ -48,11 +48,25 @@ def _expand_slice(slice_, size):
     return np.arange(*slice_.indices(size))
 
 
-def _try_get_item(x):
-    try:
-        return x.item()
-    except AttributeError:
-        return x
+def _sanitize_slice_element(x):
+    from .variable import Variable
+    from .dataarray import DataArray
+
+    if isinstance(x, (Variable, DataArray)):
+        x = x.values
+
+    if isinstance(x, np.ndarray):
+        if x.ndim != 0:
+            raise ValueError('cannot use non-scalar arrays in a slice for '
+                             'xarray indexing: {}'.format(x))
+        x = x[()]
+
+    if isinstance(x, np.timedelta64):
+        # pandas does not support indexing with np.timedelta64 yet:
+        # https://github.com/pandas-dev/pandas/issues/20393
+        x = pd.Timedelta(x)
+
+    return x
 
 
 def _asarray_tuplesafe(values):
@@ -119,9 +133,9 @@ def convert_label_indexer(index, label, index_name='', method=None,
             raise NotImplementedError(
                 'cannot use ``method`` argument if any indexers are '
                 'slice objects')
-        indexer = index.slice_indexer(_try_get_item(label.start),
-                                      _try_get_item(label.stop),
-                                      _try_get_item(label.step))
+        indexer = index.slice_indexer(_sanitize_slice_element(label.start),
+                                      _sanitize_slice_element(label.stop),
+                                      _sanitize_slice_element(label.step))
         if not isinstance(indexer, slice):
             # unlike pandas, in xarray we never want to silently convert a
             # slice indexer into an array indexer
diff --git a/xarray/tests/test_dataarray.py b/xarray/tests/test_dataarray.py
index 059e93fc70c..3fd229cf394 100644
--- a/xarray/tests/test_dataarray.py
+++ b/xarray/tests/test_dataarray.py
@@ -779,6 +779,22 @@ def test_sel_dataarray(self):
         assert 'new_dim' in actual.coords
         assert_equal(actual['new_dim'].drop('x'), ind['new_dim'])
 
+    def test_sel_invalid_slice(self):
+        array = DataArray(np.arange(10), [('x', np.arange(10))])
+        with raises_regex(ValueError, 'cannot use non-scalar arrays'):
+            array.sel(x=slice(array.x))
+
+    def test_sel_dataarray_datetime(self):
+        # regression test for GH1240
+        times = pd.date_range('2000-01-01', freq='D', periods=365)
+        array = DataArray(np.arange(365), [('time', times)])
+        result = array.sel(time=slice(array.time[0], array.time[-1]))
+        assert_equal(result, array)
+
+        array = DataArray(np.arange(365), [('delta', times - times[0])])
+        result = array.sel(delta=slice(array.delta[0], array.delta[-1]))
+        assert_equal(result, array)
+
     def test_sel_no_index(self):
         array = DataArray(np.arange(10), dims='x')
         assert_identical(array[0], array.sel(x=0))