diff --git a/crates/assists/src/handlers/extract_function.rs b/crates/assists/src/handlers/extract_function.rs
new file mode 100644
index 0000000000..d876eabca9
--- /dev/null
+++ b/crates/assists/src/handlers/extract_function.rs
@@ -0,0 +1,2159 @@
+use either::Either;
+use hir::{HirDisplay, Local};
+use ide_db::{
+    defs::{Definition, NameRefClass},
+    search::{FileReference, ReferenceAccess, SearchScope},
+};
+use itertools::Itertools;
+use stdx::format_to;
+use syntax::{
+    algo::SyntaxRewriter,
+    ast::{
+        self,
+        edit::{AstNodeEdit, IndentLevel},
+        AstNode,
+    },
+    AstToken, Direction, SyntaxElement,
+    SyntaxKind::{self, BLOCK_EXPR, BREAK_EXPR, COMMENT, PATH_EXPR, RETURN_EXPR},
+    SyntaxNode, SyntaxToken, TextRange, TextSize, TokenAtOffset, T,
+};
+use test_utils::mark;
+
+use crate::{
+    assist_context::{AssistContext, Assists},
+    AssistId,
+};
+
+// Assist: extract_function
+//
+// Extracts selected statements into new function.
+//
+// ```
+// fn main() {
+//     let n = 1;
+//     $0let m = n + 2;
+//     let k = m + n;$0
+//     let g = 3;
+// }
+// ```
+// ->
+// ```
+// fn main() {
+//     let n = 1;
+//     fun_name(n);
+//     let g = 3;
+// }
+//
+// fn $0fun_name(n: i32) {
+//     let m = n + 2;
+//     let k = m + n;
+// }
+// ```
+pub(crate) fn extract_function(acc: &mut Assists, ctx: &AssistContext) -> Option<()> {
+    if ctx.frange.range.is_empty() {
+        return None;
+    }
+
+    let node = ctx.covering_element();
+    if node.kind() == COMMENT {
+        mark::hit!(extract_function_in_comment_is_not_applicable);
+        return None;
+    }
+
+    let node = element_to_node(node);
+
+    let body = extraction_target(&node, ctx.frange.range)?;
+
+    let vars_used_in_body = vars_used_in_body(ctx, &body);
+    let self_param = self_param_from_usages(ctx, &body, &vars_used_in_body);
+
+    let anchor = if self_param.is_some() { Anchor::Method } else { Anchor::Freestanding };
+    let insert_after = scope_for_fn_insertion(&body, anchor)?;
+    let module = ctx.sema.scope(&insert_after).module()?;
+
+    let vars_defined_in_body_and_outlive = vars_defined_in_body_and_outlive(ctx, &body);
+    let ret_ty = body_return_ty(ctx, &body)?;
+
+    // FIXME: we compute variables that outlive here just to check `never!` condition
+    //        this requires traversing whole `body` (cheap) and finding all references (expensive)
+    //        maybe we can move this check to `edit` closure somehow?
+    if stdx::never!(!vars_defined_in_body_and_outlive.is_empty() && !ret_ty.is_unit()) {
+        // We should not have variables that outlive body if we have expression block
+        return None;
+    }
+
+    let target_range = match &body {
+        FunctionBody::Expr(expr) => expr.syntax().text_range(),
+        FunctionBody::Span { .. } => ctx.frange.range,
+    };
+
+    acc.add(
+        AssistId("extract_function", crate::AssistKind::RefactorExtract),
+        "Extract into function",
+        target_range,
+        move |builder| {
+            let params = extracted_function_params(ctx, &body, &vars_used_in_body);
+
+            let fun = Function {
+                name: "fun_name".to_string(),
+                self_param: self_param.map(|(_, pat)| pat),
+                params,
+                ret_ty,
+                body,
+                vars_defined_in_body_and_outlive,
+            };
+
+            builder.replace(target_range, format_replacement(ctx, &fun));
+
+            let new_indent = IndentLevel::from_node(&insert_after);
+            let old_indent = fun.body.indent_level();
+
+            let fn_def = format_function(ctx, module, &fun, old_indent, new_indent);
+            let insert_offset = insert_after.text_range().end();
+            builder.insert(insert_offset, fn_def);
+        },
+    )
+}
+
+#[derive(Debug)]
+struct Function {
+    name: String,
+    self_param: Option<ast::SelfParam>,
+    params: Vec<Param>,
+    ret_ty: RetType,
+    body: FunctionBody,
+    vars_defined_in_body_and_outlive: Vec<Local>,
+}
+
+#[derive(Debug)]
+struct Param {
+    var: Local,
+    ty: hir::Type,
+    has_usages_afterwards: bool,
+    has_mut_inside_body: bool,
+    is_copy: bool,
+}
+
+#[derive(Debug, Clone, Copy, PartialEq, Eq)]
+enum ParamKind {
+    Value,
+    MutValue,
+    SharedRef,
+    MutRef,
+}
+
+impl ParamKind {
+    fn is_ref(&self) -> bool {
+        matches!(self, ParamKind::SharedRef | ParamKind::MutRef)
+    }
+}
+
+impl Param {
+    fn kind(&self) -> ParamKind {
+        match (self.has_usages_afterwards, self.has_mut_inside_body, self.is_copy) {
+            (true, true, _) => ParamKind::MutRef,
+            (true, false, false) => ParamKind::SharedRef,
+            (false, true, _) => ParamKind::MutValue,
+            (true, false, true) | (false, false, _) => ParamKind::Value,
+        }
+    }
+
+    fn value_prefix(&self) -> &'static str {
+        match self.kind() {
+            ParamKind::Value | ParamKind::MutValue => "",
+            ParamKind::SharedRef => "&",
+            ParamKind::MutRef => "&mut ",
+        }
+    }
+
+    fn type_prefix(&self) -> &'static str {
+        match self.kind() {
+            ParamKind::Value | ParamKind::MutValue => "",
+            ParamKind::SharedRef => "&",
+            ParamKind::MutRef => "&mut ",
+        }
+    }
+
+    fn mut_pattern(&self) -> &'static str {
+        match self.kind() {
+            ParamKind::MutValue => "mut ",
+            _ => "",
+        }
+    }
+}
+
+#[derive(Debug)]
+enum RetType {
+    Expr(hir::Type),
+    Stmt,
+}
+
+impl RetType {
+    fn is_unit(&self) -> bool {
+        match self {
+            RetType::Expr(ty) => ty.is_unit(),
+            RetType::Stmt => true,
+        }
+    }
+
+    fn as_fn_ret(&self) -> Option<&hir::Type> {
+        match self {
+            RetType::Stmt => None,
+            RetType::Expr(ty) if ty.is_unit() => None,
+            RetType::Expr(ty) => Some(ty),
+        }
+    }
+}
+
+/// Semantically same as `ast::Expr`, but preserves identity when using only part of the Block
+#[derive(Debug)]
+enum FunctionBody {
+    Expr(ast::Expr),
+    Span { elements: Vec<SyntaxElement>, leading_indent: String },
+}
+
+impl FunctionBody {
+    fn from_whole_node(node: SyntaxNode) -> Option<Self> {
+        match node.kind() {
+            PATH_EXPR => None,
+            BREAK_EXPR => ast::BreakExpr::cast(node).and_then(|e| e.expr()).map(Self::Expr),
+            RETURN_EXPR => ast::ReturnExpr::cast(node).and_then(|e| e.expr()).map(Self::Expr),
+            BLOCK_EXPR => ast::BlockExpr::cast(node)
+                .filter(|it| it.is_standalone())
+                .map(Into::into)
+                .map(Self::Expr),
+            _ => ast::Expr::cast(node).map(Self::Expr),
+        }
+    }
+
+    fn from_range(node: &SyntaxNode, range: TextRange) -> Option<FunctionBody> {
+        let mut first = node.token_at_offset(range.start()).left_biased()?;
+        let last = node.token_at_offset(range.end()).right_biased()?;
+
+        let mut leading_indent = String::new();
+
+        let leading_trivia = first
+            .siblings_with_tokens(Direction::Prev)
+            .skip(1)
+            .take_while(|e| e.kind() == SyntaxKind::WHITESPACE && e.as_token().is_some());
+
+        for e in leading_trivia {
+            let token = e.as_token().unwrap();
+            let text = token.text();
+            match text.rfind('\n') {
+                Some(pos) => {
+                    leading_indent = text[pos..].to_owned();
+                    break;
+                }
+                None => first = token.clone(),
+            }
+        }
+
+        let mut elements: Vec<_> = first
+            .siblings_with_tokens(Direction::Next)
+            .take_while(|e| e.as_token() != Some(&last))
+            .collect();
+
+        if !(last.kind() == SyntaxKind::WHITESPACE && last.text().lines().count() <= 2) {
+            elements.push(last.into());
+        }
+
+        Some(FunctionBody::Span { elements, leading_indent })
+    }
+
+    fn indent_level(&self) -> IndentLevel {
+        match &self {
+            FunctionBody::Expr(expr) => IndentLevel::from_node(expr.syntax()),
+            FunctionBody::Span { elements, .. } => elements
+                .iter()
+                .filter_map(SyntaxElement::as_node)
+                .map(IndentLevel::from_node)
+                .min_by_key(|level| level.0)
+                .expect("body must contain at least one node"),
+        }
+    }
+
+    fn tail_expr(&self) -> Option<ast::Expr> {
+        match &self {
+            FunctionBody::Expr(expr) => Some(expr.clone()),
+            FunctionBody::Span { elements, .. } => {
+                elements.iter().rev().find_map(|e| e.as_node()).cloned().and_then(ast::Expr::cast)
+            }
+        }
+    }
+
+    fn descendants(&self) -> impl Iterator<Item = SyntaxNode> + '_ {
+        match self {
+            FunctionBody::Expr(expr) => Either::Right(expr.syntax().descendants()),
+            FunctionBody::Span { elements, .. } => Either::Left(
+                elements
+                    .iter()
+                    .filter_map(SyntaxElement::as_node)
+                    .flat_map(SyntaxNode::descendants),
+            ),
+        }
+    }
+
+    fn text_range(&self) -> TextRange {
+        match self {
+            FunctionBody::Expr(expr) => expr.syntax().text_range(),
+            FunctionBody::Span { elements, .. } => TextRange::new(
+                elements.first().unwrap().text_range().start(),
+                elements.last().unwrap().text_range().end(),
+            ),
+        }
+    }
+
+    fn contains_range(&self, range: TextRange) -> bool {
+        self.text_range().contains_range(range)
+    }
+
+    fn preceedes_range(&self, range: TextRange) -> bool {
+        self.text_range().end() <= range.start()
+    }
+
+    fn contains_node(&self, node: &SyntaxNode) -> bool {
+        self.contains_range(node.text_range())
+    }
+}
+
+impl HasTokenAtOffset for FunctionBody {
+    fn token_at_offset(&self, offset: TextSize) -> TokenAtOffset<SyntaxToken> {
+        match self {
+            FunctionBody::Expr(expr) => expr.syntax().token_at_offset(offset),
+            FunctionBody::Span { elements, .. } => {
+                stdx::always!(self.text_range().contains(offset));
+                let mut iter = elements
+                    .iter()
+                    .filter(|element| element.text_range().contains_inclusive(offset));
+                let element1 = iter.next().expect("offset does not fall into body");
+                let element2 = iter.next();
+                stdx::always!(iter.next().is_none(), "> 2 tokens at offset");
+                let t1 = match element1 {
+                    syntax::NodeOrToken::Node(node) => node.token_at_offset(offset),
+                    syntax::NodeOrToken::Token(token) => TokenAtOffset::Single(token.clone()),
+                };
+                let t2 = element2.map(|e| match e {
+                    syntax::NodeOrToken::Node(node) => node.token_at_offset(offset),
+                    syntax::NodeOrToken::Token(token) => TokenAtOffset::Single(token.clone()),
+                });
+
+                match t2 {
+                    Some(t2) => match (t1.clone().right_biased(), t2.clone().left_biased()) {
+                        (Some(e1), Some(e2)) => TokenAtOffset::Between(e1, e2),
+                        (Some(_), None) => t1,
+                        (None, _) => t2,
+                    },
+                    None => t1,
+                }
+            }
+        }
+    }
+}
+
+/// node or token's parent
+fn element_to_node(node: SyntaxElement) -> SyntaxNode {
+    match node {
+        syntax::NodeOrToken::Node(n) => n,
+        syntax::NodeOrToken::Token(t) => t.parent(),
+    }
+}
+
+/// Try to guess what user wants to extract
+///
+/// We have basically have two cases:
+/// * We want whole node, like `loop {}`, `2 + 2`, `{ let n = 1; }` exprs.
+///   Then we can use `ast::Expr`
+/// * We want a few statements for a block. E.g.
+///   ```rust,no_run
+///   fn foo() -> i32 {
+///     let m = 1;
+///     $0
+///     let n = 2;
+///     let k = 3;
+///     k + n
+///     $0
+///   }
+///   ```
+///
+fn extraction_target(node: &SyntaxNode, selection_range: TextRange) -> Option<FunctionBody> {
+    // we have selected exactly the expr node
+    // wrap it before anything else
+    if node.text_range() == selection_range {
+        let body = FunctionBody::from_whole_node(node.clone());
+        if body.is_some() {
+            return body;
+        }
+    }
+
+    // we have selected a few statements in a block
+    // so covering_element returns the whole block
+    if node.kind() == BLOCK_EXPR {
+        let body = FunctionBody::from_range(&node, selection_range);
+        if body.is_some() {
+            return body;
+        }
+    }
+
+    // we have selected single statement
+    // `from_whole_node` failed because (let) statement is not and expression
+    // so we try to expand covering_element to parent and repeat the previous
+    if let Some(parent) = node.parent() {
+        if parent.kind() == BLOCK_EXPR {
+            let body = FunctionBody::from_range(&parent, selection_range);
+            if body.is_some() {
+                return body;
+            }
+        }
+    }
+
+    // select the closest containing expr (both ifs are used)
+    std::iter::once(node.clone()).chain(node.ancestors()).find_map(FunctionBody::from_whole_node)
+}
+
+/// list local variables that are referenced in `body`
+fn vars_used_in_body(ctx: &AssistContext, body: &FunctionBody) -> Vec<Local> {
+    // FIXME: currently usages inside macros are not found
+    body.descendants()
+        .filter_map(ast::NameRef::cast)
+        .filter_map(|name_ref| NameRefClass::classify(&ctx.sema, &name_ref))
+        .map(|name_kind| name_kind.referenced(ctx.db()))
+        .filter_map(|definition| match definition {
+            Definition::Local(local) => Some(local),
+            _ => None,
+        })
+        .unique()
+        .collect()
+}
+
+/// find `self` param, that was not defined inside `body`
+///
+/// It should skip `self` params from impls inside `body`
+fn self_param_from_usages(
+    ctx: &AssistContext,
+    body: &FunctionBody,
+    vars_used_in_body: &[Local],
+) -> Option<(Local, ast::SelfParam)> {
+    let mut iter = vars_used_in_body
+        .iter()
+        .filter(|var| var.is_self(ctx.db()))
+        .map(|var| (var, var.source(ctx.db())))
+        .filter(|(_, src)| is_defined_before(ctx, body, src))
+        .filter_map(|(&node, src)| match src.value {
+            Either::Right(it) => Some((node, it)),
+            Either::Left(_) => {
+                stdx::never!(false, "Local::is_self returned true, but source is IdentPat");
+                None
+            }
+        });
+
+    let self_param = iter.next();
+    stdx::always!(
+        iter.next().is_none(),
+        "body references two different self params, both defined outside"
+    );
+
+    self_param
+}
+
+/// find variables that should be extracted as params
+///
+/// Computes additional info that affects param type and mutability
+fn extracted_function_params(
+    ctx: &AssistContext,
+    body: &FunctionBody,
+    vars_used_in_body: &[Local],
+) -> Vec<Param> {
+    vars_used_in_body
+        .iter()
+        .filter(|var| !var.is_self(ctx.db()))
+        .map(|node| (node, node.source(ctx.db())))
+        .filter(|(_, src)| is_defined_before(ctx, body, src))
+        .filter_map(|(&node, src)| {
+            if src.value.is_left() {
+                Some(node)
+            } else {
+                stdx::never!(false, "Local::is_self returned false, but source is SelfParam");
+                None
+            }
+        })
+        .map(|var| {
+            let usages = LocalUsages::find(ctx, var);
+            let ty = var.ty(ctx.db());
+            let is_copy = ty.is_copy(ctx.db());
+            Param {
+                var,
+                ty,
+                has_usages_afterwards: has_usages_after_body(&usages, body),
+                has_mut_inside_body: has_exclusive_usages(ctx, &usages, body),
+                is_copy,
+            }
+        })
+        .collect()
+}
+
+fn has_usages_after_body(usages: &LocalUsages, body: &FunctionBody) -> bool {
+    usages.iter().any(|reference| body.preceedes_range(reference.range))
+}
+
+/// checks if relevant var is used with `&mut` access inside body
+fn has_exclusive_usages(ctx: &AssistContext, usages: &LocalUsages, body: &FunctionBody) -> bool {
+    usages
+        .iter()
+        .filter(|reference| body.contains_range(reference.range))
+        .any(|reference| reference_is_exclusive(reference, body, ctx))
+}
+
+/// checks if this reference requires `&mut` access inside body
+fn reference_is_exclusive(
+    reference: &FileReference,
+    body: &FunctionBody,
+    ctx: &AssistContext,
+) -> bool {
+    // we directly modify variable with set: `n = 0`, `n += 1`
+    if reference.access == Some(ReferenceAccess::Write) {
+        return true;
+    }
+
+    // we take `&mut` reference to variable: `&mut v`
+    let path = match path_element_of_reference(body, reference) {
+        Some(path) => path,
+        None => return false,
+    };
+
+    expr_require_exclusive_access(ctx, &path).unwrap_or(false)
+}
+
+/// checks if this expr requires `&mut` access, recurses on field access
+fn expr_require_exclusive_access(ctx: &AssistContext, expr: &ast::Expr) -> Option<bool> {
+    let parent = expr.syntax().parent()?;
+
+    if let Some(bin_expr) = ast::BinExpr::cast(parent.clone()) {
+        if bin_expr.op_kind()?.is_assignment() {
+            return Some(bin_expr.lhs()?.syntax() == expr.syntax());
+        }
+        return Some(false);
+    }
+
+    if let Some(ref_expr) = ast::RefExpr::cast(parent.clone()) {
+        return Some(ref_expr.mut_token().is_some());
+    }
+
+    if let Some(method_call) = ast::MethodCallExpr::cast(parent.clone()) {
+        let func = ctx.sema.resolve_method_call(&method_call)?;
+        let self_param = func.self_param(ctx.db())?;
+        let access = self_param.access(ctx.db());
+
+        return Some(matches!(access, hir::Access::Exclusive));
+    }
+
+    if let Some(field) = ast::FieldExpr::cast(parent) {
+        return expr_require_exclusive_access(ctx, &field.into());
+    }
+
+    Some(false)
+}
+
+/// Container of local varaible usages
+///
+/// Semanticall same as `UsageSearchResult`, but provides more convenient interface
+struct LocalUsages(ide_db::search::UsageSearchResult);
+
+impl LocalUsages {
+    fn find(ctx: &AssistContext, var: Local) -> Self {
+        Self(
+            Definition::Local(var)
+                .usages(&ctx.sema)
+                .in_scope(SearchScope::single_file(ctx.frange.file_id))
+                .all(),
+        )
+    }
+
+    fn iter(&self) -> impl Iterator<Item = &FileReference> + '_ {
+        self.0.iter().flat_map(|(_, rs)| rs.iter())
+    }
+}
+
+trait HasTokenAtOffset {
+    fn token_at_offset(&self, offset: TextSize) -> TokenAtOffset<SyntaxToken>;
+}
+
+impl HasTokenAtOffset for SyntaxNode {
+    fn token_at_offset(&self, offset: TextSize) -> TokenAtOffset<SyntaxToken> {
+        SyntaxNode::token_at_offset(&self, offset)
+    }
+}
+
+/// find relevant `ast::PathExpr` for reference
+///
+/// # Preconditions
+///
+/// `node` must cover `reference`, that is `node.text_range().contains_range(reference.range)`
+fn path_element_of_reference(
+    node: &dyn HasTokenAtOffset,
+    reference: &FileReference,
+) -> Option<ast::Expr> {
+    let token = node.token_at_offset(reference.range.start()).right_biased().or_else(|| {
+        stdx::never!(false, "cannot find token at variable usage: {:?}", reference);
+        None
+    })?;
+    let path = token.ancestors().find_map(ast::Expr::cast).or_else(|| {
+        stdx::never!(false, "cannot find path parent of variable usage: {:?}", token);
+        None
+    })?;
+    stdx::always!(matches!(path, ast::Expr::PathExpr(_)));
+    Some(path)
+}
+
+/// list local variables defined inside `body`
+fn vars_defined_in_body(body: &FunctionBody, ctx: &AssistContext) -> Vec<Local> {
+    // FIXME: this doesn't work well with macros
+    //        see https://github.com/rust-analyzer/rust-analyzer/pull/7535#discussion_r570048550
+    body.descendants()
+        .filter_map(ast::IdentPat::cast)
+        .filter_map(|let_stmt| ctx.sema.to_def(&let_stmt))
+        .unique()
+        .collect()
+}
+
+/// list local variables defined inside `body` that should be returned from extracted function
+fn vars_defined_in_body_and_outlive(ctx: &AssistContext, body: &FunctionBody) -> Vec<Local> {
+    let mut vars_defined_in_body = vars_defined_in_body(&body, ctx);
+    vars_defined_in_body.retain(|var| var_outlives_body(ctx, body, var));
+    vars_defined_in_body
+}
+
+/// checks if the relevant local was defined before(outside of) body
+fn is_defined_before(
+    ctx: &AssistContext,
+    body: &FunctionBody,
+    src: &hir::InFile<Either<ast::IdentPat, ast::SelfParam>>,
+) -> bool {
+    src.file_id.original_file(ctx.db()) == ctx.frange.file_id
+        && !body.contains_node(&either_syntax(&src.value))
+}
+
+fn either_syntax(value: &Either<ast::IdentPat, ast::SelfParam>) -> &SyntaxNode {
+    match value {
+        Either::Left(pat) => pat.syntax(),
+        Either::Right(it) => it.syntax(),
+    }
+}
+
+/// checks if local variable is used after(outside of) body
+fn var_outlives_body(ctx: &AssistContext, body: &FunctionBody, var: &Local) -> bool {
+    let usages = Definition::Local(*var)
+        .usages(&ctx.sema)
+        .in_scope(SearchScope::single_file(ctx.frange.file_id))
+        .all();
+    let mut usages = usages.iter().flat_map(|(_, rs)| rs.iter());
+
+    usages.any(|reference| body.preceedes_range(reference.range))
+}
+
+fn body_return_ty(ctx: &AssistContext, body: &FunctionBody) -> Option<RetType> {
+    match body.tail_expr() {
+        Some(expr) => {
+            let ty = ctx.sema.type_of_expr(&expr)?;
+            Some(RetType::Expr(ty))
+        }
+        None => Some(RetType::Stmt),
+    }
+}
+/// Where to put extracted function definition
+#[derive(Debug)]
+enum Anchor {
+    /// Extract free function and put right after current top-level function
+    Freestanding,
+    /// Extract method and put right after current function in the impl-block
+    Method,
+}
+
+/// find where to put extracted function definition
+///
+/// Function should be put right after returned node
+fn scope_for_fn_insertion(body: &FunctionBody, anchor: Anchor) -> Option<SyntaxNode> {
+    match body {
+        FunctionBody::Expr(e) => scope_for_fn_insertion_node(e.syntax(), anchor),
+        FunctionBody::Span { elements, .. } => {
+            let node = elements.iter().find_map(|e| e.as_node())?;
+            scope_for_fn_insertion_node(&node, anchor)
+        }
+    }
+}
+
+fn scope_for_fn_insertion_node(node: &SyntaxNode, anchor: Anchor) -> Option<SyntaxNode> {
+    let mut ancestors = node.ancestors().peekable();
+    let mut last_ancestor = None;
+    while let Some(next_ancestor) = ancestors.next() {
+        match next_ancestor.kind() {
+            SyntaxKind::SOURCE_FILE => break,
+            SyntaxKind::ITEM_LIST => {
+                if !matches!(anchor, Anchor::Freestanding) {
+                    continue;
+                }
+                if ancestors.peek().map(SyntaxNode::kind) == Some(SyntaxKind::MODULE) {
+                    break;
+                }
+            }
+            SyntaxKind::ASSOC_ITEM_LIST => {
+                if !matches!(anchor, Anchor::Method) {
+                    continue;
+                }
+                if ancestors.peek().map(SyntaxNode::kind) == Some(SyntaxKind::IMPL) {
+                    break;
+                }
+            }
+            _ => {}
+        }
+        last_ancestor = Some(next_ancestor);
+    }
+    last_ancestor
+}
+
+fn format_replacement(ctx: &AssistContext, fun: &Function) -> String {
+    let mut buf = String::new();
+
+    match fun.vars_defined_in_body_and_outlive.as_slice() {
+        [] => {}
+        [var] => format_to!(buf, "let {} = ", var.name(ctx.db()).unwrap()),
+        [v0, vs @ ..] => {
+            buf.push_str("let (");
+            format_to!(buf, "{}", v0.name(ctx.db()).unwrap());
+            for var in vs {
+                format_to!(buf, ", {}", var.name(ctx.db()).unwrap());
+            }
+            buf.push_str(") = ");
+        }
+    }
+
+    if fun.self_param.is_some() {
+        format_to!(buf, "self.");
+    }
+    format_to!(buf, "{}(", fun.name);
+    format_arg_list_to(&mut buf, fun, ctx);
+    format_to!(buf, ")");
+
+    if fun.ret_ty.is_unit() {
+        format_to!(buf, ";");
+    }
+
+    buf
+}
+
+fn format_arg_list_to(buf: &mut String, fun: &Function, ctx: &AssistContext) {
+    let mut it = fun.params.iter();
+    if let Some(param) = it.next() {
+        format_arg_to(buf, ctx, param);
+    }
+    for param in it {
+        buf.push_str(", ");
+        format_arg_to(buf, ctx, param);
+    }
+}
+
+fn format_arg_to(buf: &mut String, ctx: &AssistContext, param: &Param) {
+    format_to!(buf, "{}{}", param.value_prefix(), param.var.name(ctx.db()).unwrap());
+}
+
+fn format_function(
+    ctx: &AssistContext,
+    module: hir::Module,
+    fun: &Function,
+    old_indent: IndentLevel,
+    new_indent: IndentLevel,
+) -> String {
+    let mut fn_def = String::new();
+    format_to!(fn_def, "\n\n{}fn $0{}(", new_indent, fun.name);
+    format_function_param_list_to(&mut fn_def, ctx, module, fun);
+    fn_def.push(')');
+    format_function_ret_to(&mut fn_def, ctx, module, fun);
+    fn_def.push_str(" {");
+    format_function_body_to(&mut fn_def, ctx, old_indent, new_indent, fun);
+    format_to!(fn_def, "{}}}", new_indent);
+
+    fn_def
+}
+
+fn format_function_param_list_to(
+    fn_def: &mut String,
+    ctx: &AssistContext,
+    module: hir::Module,
+    fun: &Function,
+) {
+    let mut it = fun.params.iter();
+    if let Some(self_param) = &fun.self_param {
+        format_to!(fn_def, "{}", self_param);
+    } else if let Some(param) = it.next() {
+        format_param_to(fn_def, ctx, module, param);
+    }
+    for param in it {
+        fn_def.push_str(", ");
+        format_param_to(fn_def, ctx, module, param);
+    }
+}
+
+fn format_param_to(fn_def: &mut String, ctx: &AssistContext, module: hir::Module, param: &Param) {
+    format_to!(
+        fn_def,
+        "{}{}: {}{}",
+        param.mut_pattern(),
+        param.var.name(ctx.db()).unwrap(),
+        param.type_prefix(),
+        format_type(&param.ty, ctx, module)
+    );
+}
+
+fn format_function_ret_to(
+    fn_def: &mut String,
+    ctx: &AssistContext,
+    module: hir::Module,
+    fun: &Function,
+) {
+    if let Some(ty) = fun.ret_ty.as_fn_ret() {
+        format_to!(fn_def, " -> {}", format_type(ty, ctx, module));
+    } else {
+        match fun.vars_defined_in_body_and_outlive.as_slice() {
+            [] => {}
+            [var] => {
+                format_to!(fn_def, " -> {}", format_type(&var.ty(ctx.db()), ctx, module));
+            }
+            [v0, vs @ ..] => {
+                format_to!(fn_def, " -> ({}", format_type(&v0.ty(ctx.db()), ctx, module));
+                for var in vs {
+                    format_to!(fn_def, ", {}", format_type(&var.ty(ctx.db()), ctx, module));
+                }
+                fn_def.push(')');
+            }
+        }
+    }
+}
+
+fn format_function_body_to(
+    fn_def: &mut String,
+    ctx: &AssistContext,
+    old_indent: IndentLevel,
+    new_indent: IndentLevel,
+    fun: &Function,
+) {
+    match &fun.body {
+        FunctionBody::Expr(expr) => {
+            fn_def.push('\n');
+            let expr = expr.dedent(old_indent).indent(new_indent + 1);
+            let expr = fix_param_usages(ctx, &fun.params, expr.syntax());
+            format_to!(fn_def, "{}{}", new_indent + 1, expr);
+            fn_def.push('\n');
+        }
+        FunctionBody::Span { elements, leading_indent } => {
+            format_to!(fn_def, "{}", leading_indent);
+            let new_indent_str = format!("\n{}", new_indent + 1);
+            for mut element in elements {
+                let new_ws;
+                if let Some(ws) = element.as_token().cloned().and_then(ast::Whitespace::cast) {
+                    let text = ws.syntax().text();
+                    if text.contains('\n') {
+                        let new_text = text.replace(&format!("\n{}", old_indent), &new_indent_str);
+                        new_ws = ast::make::tokens::whitespace(&new_text).into();
+                        element = &new_ws;
+                    }
+                }
+
+                match element {
+                    syntax::NodeOrToken::Node(node) => {
+                        format_to!(fn_def, "{}", fix_param_usages(ctx, &fun.params, node));
+                    }
+                    syntax::NodeOrToken::Token(token) => {
+                        format_to!(fn_def, "{}", token);
+                    }
+                }
+            }
+            if !fn_def.ends_with('\n') {
+                fn_def.push('\n');
+            }
+        }
+    }
+
+    match fun.vars_defined_in_body_and_outlive.as_slice() {
+        [] => {}
+        [var] => format_to!(fn_def, "{}{}\n", new_indent + 1, var.name(ctx.db()).unwrap()),
+        [v0, vs @ ..] => {
+            format_to!(fn_def, "{}({}", new_indent + 1, v0.name(ctx.db()).unwrap());
+            for var in vs {
+                format_to!(fn_def, ", {}", var.name(ctx.db()).unwrap());
+            }
+            fn_def.push_str(")\n");
+        }
+    }
+}
+
+fn format_type(ty: &hir::Type, ctx: &AssistContext, module: hir::Module) -> String {
+    ty.display_source_code(ctx.db(), module.into()).ok().unwrap_or_else(|| "()".to_string())
+}
+
+/// change all usages to account for added `&`/`&mut` for some params
+fn fix_param_usages(ctx: &AssistContext, params: &[Param], syntax: &SyntaxNode) -> SyntaxNode {
+    let mut rewriter = SyntaxRewriter::default();
+    for param in params {
+        if !param.kind().is_ref() {
+            continue;
+        }
+
+        let usages = LocalUsages::find(ctx, param.var);
+        let usages = usages
+            .iter()
+            .filter(|reference| syntax.text_range().contains_range(reference.range))
+            .filter_map(|reference| path_element_of_reference(syntax, reference));
+        for path in usages {
+            match path.syntax().ancestors().skip(1).find_map(ast::Expr::cast) {
+                Some(ast::Expr::MethodCallExpr(_)) | Some(ast::Expr::FieldExpr(_)) => {
+                    // do nothing
+                }
+                Some(ast::Expr::RefExpr(node))
+                    if param.kind() == ParamKind::MutRef && node.mut_token().is_some() =>
+                {
+                    rewriter.replace_ast(&node.clone().into(), &node.expr().unwrap());
+                }
+                Some(ast::Expr::RefExpr(node))
+                    if param.kind() == ParamKind::SharedRef && node.mut_token().is_none() =>
+                {
+                    rewriter.replace_ast(&node.clone().into(), &node.expr().unwrap());
+                }
+                Some(_) | None => {
+                    rewriter.replace_ast(&path, &ast::make::expr_prefix(T![*], path.clone()));
+                }
+            };
+        }
+    }
+
+    rewriter.rewrite(syntax)
+}
+
+#[cfg(test)]
+mod tests {
+    use crate::tests::{check_assist, check_assist_not_applicable};
+
+    use super::*;
+
+    #[test]
+    fn no_args_from_binary_expr() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() {
+    foo($01 + 1$0);
+}"#,
+            r#"
+fn foo() {
+    foo(fun_name());
+}
+
+fn $0fun_name() -> i32 {
+    1 + 1
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_from_binary_expr_in_module() {
+        check_assist(
+            extract_function,
+            r#"
+mod bar {
+    fn foo() {
+        foo($01 + 1$0);
+    }
+}"#,
+            r#"
+mod bar {
+    fn foo() {
+        foo(fun_name());
+    }
+
+    fn $0fun_name() -> i32 {
+        1 + 1
+    }
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_from_binary_expr_indented() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() {
+    $0{ 1 + 1 }$0;
+}"#,
+            r#"
+fn foo() {
+    fun_name();
+}
+
+fn $0fun_name() -> i32 {
+    { 1 + 1 }
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_from_stmt_with_last_expr() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() -> i32 {
+    let k = 1;
+    $0let m = 1;
+    m + 1$0
+}"#,
+            r#"
+fn foo() -> i32 {
+    let k = 1;
+    fun_name()
+}
+
+fn $0fun_name() -> i32 {
+    let m = 1;
+    m + 1
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_from_stmt_unit() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() {
+    let k = 3;
+    $0let m = 1;
+    let n = m + 1;$0
+    let g = 5;
+}"#,
+            r#"
+fn foo() {
+    let k = 3;
+    fun_name();
+    let g = 5;
+}
+
+fn $0fun_name() {
+    let m = 1;
+    let n = m + 1;
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_if() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() {
+    $0if true { }$0
+}"#,
+            r#"
+fn foo() {
+    fun_name();
+}
+
+fn $0fun_name() {
+    if true { }
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_if_else() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() -> i32 {
+    $0if true { 1 } else { 2 }$0
+}"#,
+            r#"
+fn foo() -> i32 {
+    fun_name()
+}
+
+fn $0fun_name() -> i32 {
+    if true { 1 } else { 2 }
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_if_let_else() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() -> i32 {
+    $0if let true = false { 1 } else { 2 }$0
+}"#,
+            r#"
+fn foo() -> i32 {
+    fun_name()
+}
+
+fn $0fun_name() -> i32 {
+    if let true = false { 1 } else { 2 }
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_match() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() -> i32 {
+    $0match true {
+        true => 1,
+        false => 2,
+    }$0
+}"#,
+            r#"
+fn foo() -> i32 {
+    fun_name()
+}
+
+fn $0fun_name() -> i32 {
+    match true {
+        true => 1,
+        false => 2,
+    }
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_while() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() {
+    $0while true { }$0
+}"#,
+            r#"
+fn foo() {
+    fun_name();
+}
+
+fn $0fun_name() {
+    while true { }
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_for() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() {
+    $0for v in &[0, 1] { }$0
+}"#,
+            r#"
+fn foo() {
+    fun_name();
+}
+
+fn $0fun_name() {
+    for v in &[0, 1] { }
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_from_loop_unit() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() {
+    $0loop {
+        let m = 1;
+    }$0
+}"#,
+            r#"
+fn foo() {
+    fun_name()
+}
+
+fn $0fun_name() -> ! {
+    loop {
+        let m = 1;
+    }
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_from_loop_with_return() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() {
+    let v = $0loop {
+        let m = 1;
+        break m;
+    }$0;
+}"#,
+            r#"
+fn foo() {
+    let v = fun_name();
+}
+
+fn $0fun_name() -> i32 {
+    loop {
+        let m = 1;
+        break m;
+    }
+}"#,
+        );
+    }
+
+    #[test]
+    fn no_args_from_match() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() {
+    let v: i32 = $0match Some(1) {
+        Some(x) => x,
+        None => 0,
+    }$0;
+}"#,
+            r#"
+fn foo() {
+    let v: i32 = fun_name();
+}
+
+fn $0fun_name() -> i32 {
+    match Some(1) {
+        Some(x) => x,
+        None => 0,
+    }
+}"#,
+        );
+    }
+
+    #[test]
+    fn argument_form_expr() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() -> u32 {
+    let n = 2;
+    $0n+2$0
+}",
+            r"
+fn foo() -> u32 {
+    let n = 2;
+    fun_name(n)
+}
+
+fn $0fun_name(n: u32) -> u32 {
+    n+2
+}",
+        )
+    }
+
+    #[test]
+    fn argument_used_twice_form_expr() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() -> u32 {
+    let n = 2;
+    $0n+n$0
+}",
+            r"
+fn foo() -> u32 {
+    let n = 2;
+    fun_name(n)
+}
+
+fn $0fun_name(n: u32) -> u32 {
+    n+n
+}",
+        )
+    }
+
+    #[test]
+    fn two_arguments_form_expr() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() -> u32 {
+    let n = 2;
+    let m = 3;
+    $0n+n*m$0
+}",
+            r"
+fn foo() -> u32 {
+    let n = 2;
+    let m = 3;
+    fun_name(n, m)
+}
+
+fn $0fun_name(n: u32, m: u32) -> u32 {
+    n+n*m
+}",
+        )
+    }
+
+    #[test]
+    fn argument_and_locals() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() -> u32 {
+    let n = 2;
+    $0let m = 1;
+    n + m$0
+}",
+            r"
+fn foo() -> u32 {
+    let n = 2;
+    fun_name(n)
+}
+
+fn $0fun_name(n: u32) -> u32 {
+    let m = 1;
+    n + m
+}",
+        )
+    }
+
+    #[test]
+    fn in_comment_is_not_applicable() {
+        mark::check!(extract_function_in_comment_is_not_applicable);
+        check_assist_not_applicable(extract_function, r"fn main() { 1 + /* $0comment$0 */ 1; }");
+    }
+
+    #[test]
+    fn part_of_expr_stmt() {
+        check_assist(
+            extract_function,
+            "
+fn foo() {
+    $01$0 + 1;
+}",
+            "
+fn foo() {
+    fun_name() + 1;
+}
+
+fn $0fun_name() -> i32 {
+    1
+}",
+        );
+    }
+
+    #[test]
+    fn function_expr() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() {
+    $0bar(1 + 1)$0
+}"#,
+            r#"
+fn foo() {
+    fun_name();
+}
+
+fn $0fun_name() {
+    bar(1 + 1)
+}"#,
+        )
+    }
+
+    #[test]
+    fn extract_from_nested() {
+        check_assist(
+            extract_function,
+            r"
+fn main() {
+    let x = true;
+    let tuple = match x {
+        true => ($02 + 2$0, true)
+        _ => (0, false)
+    };
+}",
+            r"
+fn main() {
+    let x = true;
+    let tuple = match x {
+        true => (fun_name(), true)
+        _ => (0, false)
+    };
+}
+
+fn $0fun_name() -> i32 {
+    2 + 2
+}",
+        );
+    }
+
+    #[test]
+    fn param_from_closure() {
+        check_assist(
+            extract_function,
+            r"
+fn main() {
+    let lambda = |x: u32| $0x * 2$0;
+}",
+            r"
+fn main() {
+    let lambda = |x: u32| fun_name(x);
+}
+
+fn $0fun_name(x: u32) -> u32 {
+    x * 2
+}",
+        );
+    }
+
+    #[test]
+    fn extract_return_stmt() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() -> u32 {
+    $0return 2 + 2$0;
+}",
+            r"
+fn foo() -> u32 {
+    return fun_name();
+}
+
+fn $0fun_name() -> u32 {
+    2 + 2
+}",
+        );
+    }
+
+    #[test]
+    fn does_not_add_extra_whitespace() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() -> u32 {
+
+
+    $0return 2 + 2$0;
+}",
+            r"
+fn foo() -> u32 {
+
+
+    return fun_name();
+}
+
+fn $0fun_name() -> u32 {
+    2 + 2
+}",
+        );
+    }
+
+    #[test]
+    fn break_stmt() {
+        check_assist(
+            extract_function,
+            r"
+fn main() {
+    let result = loop {
+        $0break 2 + 2$0;
+    };
+}",
+            r"
+fn main() {
+    let result = loop {
+        break fun_name();
+    };
+}
+
+fn $0fun_name() -> i32 {
+    2 + 2
+}",
+        );
+    }
+
+    #[test]
+    fn extract_cast() {
+        check_assist(
+            extract_function,
+            r"
+fn main() {
+    let v = $00f32 as u32$0;
+}",
+            r"
+fn main() {
+    let v = fun_name();
+}
+
+fn $0fun_name() -> u32 {
+    0f32 as u32
+}",
+        );
+    }
+
+    #[test]
+    fn return_not_applicable() {
+        check_assist_not_applicable(extract_function, r"fn foo() { $0return$0; } ");
+    }
+
+    #[test]
+    fn method_to_freestanding() {
+        check_assist(
+            extract_function,
+            r"
+struct S;
+
+impl S {
+    fn foo(&self) -> i32 {
+        $01+1$0
+    }
+}",
+            r"
+struct S;
+
+impl S {
+    fn foo(&self) -> i32 {
+        fun_name()
+    }
+}
+
+fn $0fun_name() -> i32 {
+    1+1
+}",
+        );
+    }
+
+    #[test]
+    fn method_with_reference() {
+        check_assist(
+            extract_function,
+            r"
+struct S { f: i32 };
+
+impl S {
+    fn foo(&self) -> i32 {
+        $01+self.f$0
+    }
+}",
+            r"
+struct S { f: i32 };
+
+impl S {
+    fn foo(&self) -> i32 {
+        self.fun_name()
+    }
+
+    fn $0fun_name(&self) -> i32 {
+        1+self.f
+    }
+}",
+        );
+    }
+
+    #[test]
+    fn method_with_mut() {
+        check_assist(
+            extract_function,
+            r"
+struct S { f: i32 };
+
+impl S {
+    fn foo(&mut self) {
+        $0self.f += 1;$0
+    }
+}",
+            r"
+struct S { f: i32 };
+
+impl S {
+    fn foo(&mut self) {
+        self.fun_name();
+    }
+
+    fn $0fun_name(&mut self) {
+        self.f += 1;
+    }
+}",
+        );
+    }
+
+    #[test]
+    fn variable_defined_inside_and_used_after_no_ret() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() {
+    let n = 1;
+    $0let k = n * n;$0
+    let m = k + 1;
+}",
+            r"
+fn foo() {
+    let n = 1;
+    let k = fun_name(n);
+    let m = k + 1;
+}
+
+fn $0fun_name(n: i32) -> i32 {
+    let k = n * n;
+    k
+}",
+        );
+    }
+
+    #[test]
+    fn two_variables_defined_inside_and_used_after_no_ret() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() {
+    let n = 1;
+    $0let k = n * n;
+    let m = k + 2;$0
+    let h = k + m;
+}",
+            r"
+fn foo() {
+    let n = 1;
+    let (k, m) = fun_name(n);
+    let h = k + m;
+}
+
+fn $0fun_name(n: i32) -> (i32, i32) {
+    let k = n * n;
+    let m = k + 2;
+    (k, m)
+}",
+        );
+    }
+
+    #[test]
+    fn nontrivial_patterns_define_variables() {
+        check_assist(
+            extract_function,
+            r"
+struct Counter(i32);
+fn foo() {
+    $0let Counter(n) = Counter(0);$0
+    let m = n;
+}",
+            r"
+struct Counter(i32);
+fn foo() {
+    let n = fun_name();
+    let m = n;
+}
+
+fn $0fun_name() -> i32 {
+    let Counter(n) = Counter(0);
+    n
+}",
+        );
+    }
+
+    #[test]
+    fn struct_with_two_fields_pattern_define_variables() {
+        check_assist(
+            extract_function,
+            r"
+struct Counter { n: i32, m: i32 };
+fn foo() {
+    $0let Counter { n, m: k } = Counter { n: 1, m: 2 };$0
+    let h = n + k;
+}",
+            r"
+struct Counter { n: i32, m: i32 };
+fn foo() {
+    let (n, k) = fun_name();
+    let h = n + k;
+}
+
+fn $0fun_name() -> (i32, i32) {
+    let Counter { n, m: k } = Counter { n: 1, m: 2 };
+    (n, k)
+}",
+        );
+    }
+
+    #[test]
+    fn mut_var_from_outer_scope() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() {
+    let mut n = 1;
+    $0n += 1;$0
+    let m = n + 1;
+}",
+            r"
+fn foo() {
+    let mut n = 1;
+    fun_name(&mut n);
+    let m = n + 1;
+}
+
+fn $0fun_name(n: &mut i32) {
+    *n += 1;
+}",
+        );
+    }
+
+    #[test]
+    fn mut_field_from_outer_scope() {
+        check_assist(
+            extract_function,
+            r"
+struct C { n: i32 }
+fn foo() {
+    let mut c = C { n: 0 };
+    $0c.n += 1;$0
+    let m = c.n + 1;
+}",
+            r"
+struct C { n: i32 }
+fn foo() {
+    let mut c = C { n: 0 };
+    fun_name(&mut c);
+    let m = c.n + 1;
+}
+
+fn $0fun_name(c: &mut C) {
+    c.n += 1;
+}",
+        );
+    }
+
+    #[test]
+    fn mut_nested_field_from_outer_scope() {
+        check_assist(
+            extract_function,
+            r"
+struct P { n: i32}
+struct C { p: P }
+fn foo() {
+    let mut c = C { p: P { n: 0 } };
+    let mut v = C { p: P { n: 0 } };
+    let u = C { p: P { n: 0 } };
+    $0c.p.n += u.p.n;
+    let r = &mut v.p.n;$0
+    let m = c.p.n + v.p.n + u.p.n;
+}",
+            r"
+struct P { n: i32}
+struct C { p: P }
+fn foo() {
+    let mut c = C { p: P { n: 0 } };
+    let mut v = C { p: P { n: 0 } };
+    let u = C { p: P { n: 0 } };
+    fun_name(&mut c, &u, &mut v);
+    let m = c.p.n + v.p.n + u.p.n;
+}
+
+fn $0fun_name(c: &mut C, u: &C, v: &mut C) {
+    c.p.n += u.p.n;
+    let r = &mut v.p.n;
+}",
+        );
+    }
+
+    #[test]
+    fn mut_param_many_usages_stmt() {
+        check_assist(
+            extract_function,
+            r"
+fn bar(k: i32) {}
+trait I: Copy {
+    fn succ(&self) -> Self;
+    fn inc(&mut self) -> Self { let v = self.succ(); *self = v; v }
+}
+impl I for i32 {
+    fn succ(&self) -> Self { *self + 1 }
+}
+fn foo() {
+    let mut n = 1;
+    $0n += n;
+    bar(n);
+    bar(n+1);
+    bar(n*n);
+    bar(&n);
+    n.inc();
+    let v = &mut n;
+    *v = v.succ();
+    n.succ();$0
+    let m = n + 1;
+}",
+            r"
+fn bar(k: i32) {}
+trait I: Copy {
+    fn succ(&self) -> Self;
+    fn inc(&mut self) -> Self { let v = self.succ(); *self = v; v }
+}
+impl I for i32 {
+    fn succ(&self) -> Self { *self + 1 }
+}
+fn foo() {
+    let mut n = 1;
+    fun_name(&mut n);
+    let m = n + 1;
+}
+
+fn $0fun_name(n: &mut i32) {
+    *n += *n;
+    bar(*n);
+    bar(*n+1);
+    bar(*n**n);
+    bar(&*n);
+    n.inc();
+    let v = n;
+    *v = v.succ();
+    n.succ();
+}",
+        );
+    }
+
+    #[test]
+    fn mut_param_many_usages_expr() {
+        check_assist(
+            extract_function,
+            r"
+fn bar(k: i32) {}
+trait I: Copy {
+    fn succ(&self) -> Self;
+    fn inc(&mut self) -> Self { let v = self.succ(); *self = v; v }
+}
+impl I for i32 {
+    fn succ(&self) -> Self { *self + 1 }
+}
+fn foo() {
+    let mut n = 1;
+    $0{
+        n += n;
+        bar(n);
+        bar(n+1);
+        bar(n*n);
+        bar(&n);
+        n.inc();
+        let v = &mut n;
+        *v = v.succ();
+        n.succ();
+    }$0
+    let m = n + 1;
+}",
+            r"
+fn bar(k: i32) {}
+trait I: Copy {
+    fn succ(&self) -> Self;
+    fn inc(&mut self) -> Self { let v = self.succ(); *self = v; v }
+}
+impl I for i32 {
+    fn succ(&self) -> Self { *self + 1 }
+}
+fn foo() {
+    let mut n = 1;
+    fun_name(&mut n);
+    let m = n + 1;
+}
+
+fn $0fun_name(n: &mut i32) {
+    {
+        *n += *n;
+        bar(*n);
+        bar(*n+1);
+        bar(*n**n);
+        bar(&*n);
+        n.inc();
+        let v = n;
+        *v = v.succ();
+        n.succ();
+    }
+}",
+        );
+    }
+
+    #[test]
+    fn mut_param_by_value() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() {
+    let mut n = 1;
+    $0n += 1;$0
+}",
+            r"
+fn foo() {
+    let mut n = 1;
+    fun_name(n);
+}
+
+fn $0fun_name(mut n: i32) {
+    n += 1;
+}",
+        );
+    }
+
+    #[test]
+    fn mut_param_because_of_mut_ref() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() {
+    let mut n = 1;
+    $0let v = &mut n;
+    *v += 1;$0
+    let k = n;
+}",
+            r"
+fn foo() {
+    let mut n = 1;
+    fun_name(&mut n);
+    let k = n;
+}
+
+fn $0fun_name(n: &mut i32) {
+    let v = n;
+    *v += 1;
+}",
+        );
+    }
+
+    #[test]
+    fn mut_param_by_value_because_of_mut_ref() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() {
+    let mut n = 1;
+    $0let v = &mut n;
+    *v += 1;$0
+}",
+            r"
+fn foo() {
+    let mut n = 1;
+    fun_name(n);
+}
+
+fn $0fun_name(mut n: i32) {
+    let v = &mut n;
+    *v += 1;
+}",
+        );
+    }
+
+    #[test]
+    fn mut_method_call() {
+        check_assist(
+            extract_function,
+            r"
+trait I {
+    fn inc(&mut self);
+}
+impl I for i32 {
+    fn inc(&mut self) { *self += 1 }
+}
+fn foo() {
+    let mut n = 1;
+    $0n.inc();$0
+}",
+            r"
+trait I {
+    fn inc(&mut self);
+}
+impl I for i32 {
+    fn inc(&mut self) { *self += 1 }
+}
+fn foo() {
+    let mut n = 1;
+    fun_name(n);
+}
+
+fn $0fun_name(mut n: i32) {
+    n.inc();
+}",
+        );
+    }
+
+    #[test]
+    fn shared_method_call() {
+        check_assist(
+            extract_function,
+            r"
+trait I {
+    fn succ(&self);
+}
+impl I for i32 {
+    fn succ(&self) { *self + 1 }
+}
+fn foo() {
+    let mut n = 1;
+    $0n.succ();$0
+}",
+            r"
+trait I {
+    fn succ(&self);
+}
+impl I for i32 {
+    fn succ(&self) { *self + 1 }
+}
+fn foo() {
+    let mut n = 1;
+    fun_name(n);
+}
+
+fn $0fun_name(n: i32) {
+    n.succ();
+}",
+        );
+    }
+
+    #[test]
+    fn mut_method_call_with_other_receiver() {
+        check_assist(
+            extract_function,
+            r"
+trait I {
+    fn inc(&mut self, n: i32);
+}
+impl I for i32 {
+    fn inc(&mut self, n: i32) { *self += n }
+}
+fn foo() {
+    let mut n = 1;
+    $0let mut m = 2;
+    m.inc(n);$0
+}",
+            r"
+trait I {
+    fn inc(&mut self, n: i32);
+}
+impl I for i32 {
+    fn inc(&mut self, n: i32) { *self += n }
+}
+fn foo() {
+    let mut n = 1;
+    fun_name(n);
+}
+
+fn $0fun_name(n: i32) {
+    let mut m = 2;
+    m.inc(n);
+}",
+        );
+    }
+
+    #[test]
+    fn non_copy_without_usages_after() {
+        check_assist(
+            extract_function,
+            r"
+struct Counter(i32);
+fn foo() {
+    let c = Counter(0);
+    $0let n = c.0;$0
+}",
+            r"
+struct Counter(i32);
+fn foo() {
+    let c = Counter(0);
+    fun_name(c);
+}
+
+fn $0fun_name(c: Counter) {
+    let n = c.0;
+}",
+        );
+    }
+
+    #[test]
+    fn non_copy_used_after() {
+        check_assist(
+            extract_function,
+            r"
+struct Counter(i32);
+fn foo() {
+    let c = Counter(0);
+    $0let n = c.0;$0
+    let m = c.0;
+}",
+            r"
+struct Counter(i32);
+fn foo() {
+    let c = Counter(0);
+    fun_name(&c);
+    let m = c.0;
+}
+
+fn $0fun_name(c: &Counter) {
+    let n = c.0;
+}",
+        );
+    }
+
+    #[test]
+    fn indented_stmts() {
+        check_assist(
+            extract_function,
+            r"
+fn foo() {
+    if true {
+        loop {
+            $0let n = 1;
+            let m = 2;$0
+        }
+    }
+}",
+            r"
+fn foo() {
+    if true {
+        loop {
+            fun_name();
+        }
+    }
+}
+
+fn $0fun_name() {
+    let n = 1;
+    let m = 2;
+}",
+        );
+    }
+
+    #[test]
+    fn indented_stmts_inside_mod() {
+        check_assist(
+            extract_function,
+            r"
+mod bar {
+    fn foo() {
+        if true {
+            loop {
+                $0let n = 1;
+                let m = 2;$0
+            }
+        }
+    }
+}",
+            r"
+mod bar {
+    fn foo() {
+        if true {
+            loop {
+                fun_name();
+            }
+        }
+    }
+
+    fn $0fun_name() {
+        let n = 1;
+        let m = 2;
+    }
+}",
+        );
+    }
+}
diff --git a/crates/assists/src/lib.rs b/crates/assists/src/lib.rs
index 559b9651e8..062a902ab0 100644
--- a/crates/assists/src/lib.rs
+++ b/crates/assists/src/lib.rs
@@ -117,6 +117,7 @@ mod handlers {
     mod convert_integer_literal;
     mod early_return;
     mod expand_glob_import;
+    mod extract_function;
     mod extract_struct_from_enum_variant;
     mod extract_variable;
     mod fill_match_arms;
@@ -174,6 +175,7 @@ mod handlers {
             early_return::convert_to_guarded_return,
             expand_glob_import::expand_glob_import,
             move_module_to_file::move_module_to_file,
+            extract_function::extract_function,
             extract_struct_from_enum_variant::extract_struct_from_enum_variant,
             extract_variable::extract_variable,
             fill_match_arms::fill_match_arms,
diff --git a/crates/assists/src/tests/generated.rs b/crates/assists/src/tests/generated.rs
index 9aa807f10a..e84f208a38 100644
--- a/crates/assists/src/tests/generated.rs
+++ b/crates/assists/src/tests/generated.rs
@@ -256,6 +256,33 @@ fn qux(bar: Bar, baz: Baz) {}
     )
 }
 
+#[test]
+fn doctest_extract_function() {
+    check_doc_test(
+        "extract_function",
+        r#####"
+fn main() {
+    let n = 1;
+    $0let m = n + 2;
+    let k = m + n;$0
+    let g = 3;
+}
+"#####,
+        r#####"
+fn main() {
+    let n = 1;
+    fun_name(n);
+    let g = 3;
+}
+
+fn $0fun_name(n: i32) {
+    let m = n + 2;
+    let k = m + n;
+}
+"#####,
+    )
+}
+
 #[test]
 fn doctest_extract_struct_from_enum_variant() {
     check_doc_test(
diff --git a/crates/syntax/src/ast/make.rs b/crates/syntax/src/ast/make.rs
index b755c96928..1da5a125ed 100644
--- a/crates/syntax/src/ast/make.rs
+++ b/crates/syntax/src/ast/make.rs
@@ -487,7 +487,7 @@ pub mod tokens {
     use crate::{ast, AstNode, Parse, SourceFile, SyntaxKind::*, SyntaxToken};
 
     pub(super) static SOURCE_FILE: Lazy<Parse<SourceFile>> =
-        Lazy::new(|| SourceFile::parse("const C: <()>::Item = (1 != 1, 2 == 2, !true)\n;\n\n"));
+        Lazy::new(|| SourceFile::parse("const C: <()>::Item = (1 != 1, 2 == 2, !true, *p)\n;\n\n"));
 
     pub fn single_space() -> SyntaxToken {
         SOURCE_FILE