We study a semi-supervised learning method based on the similarity graph and Regularized Laplacian. We give convenient optimization formulation of the Regularized Laplacian method and establish its various properties. In particular, we show that the kernel of the method can be interpreted in terms of discrete and continuous time random walks and possesses several important properties of proximity measures. Both optimization and linear algebra methods can be used for efficient computation of the classification functions. We demonstrate on numerical examples that the Regularized Laplacian method is competitive with respect to the other state of the art semi-supervised learning methods.