diff --git a/language-server/src/build-server.js b/language-server/src/build-server.js
index a2c1d25..dd6402f 100644
--- a/language-server/src/build-server.js
+++ b/language-server/src/build-server.js
@@ -22,6 +22,7 @@ import { ValidationErrorsDiagnosticsProvider } from "./features/diagnostics/vali
 import { IfThenCompletionProvider } from "./features/completion/if-then-completion.js";
 import { KeywordCompletionProvider } from "./features/completion/keyword-completion.js";
 import { SchemaCompletionProvider } from "./features/completion/schema-completion.js";
+import { ExtractSubSchemaToDefs } from "./features/codeAction/extractSubschema.js";
 
 // Hyperjump
 import { removeMediaTypePlugin } from "@hyperjump/browser";
@@ -49,6 +50,7 @@ export const buildServer = (connection) => {
   new GotoDefinitionFeature(server, schemas);
   new FindReferencesFeature(server, schemas);
   new HoverFeature(server, schemas);
+  new ExtractSubSchemaToDefs(server, schemas);
 
   // TODO: It's awkward that diagnostics needs a variable
   const diagnostics = new DiagnosticsFeature(server, [
diff --git a/language-server/src/features/codeAction/extractSubschema.js b/language-server/src/features/codeAction/extractSubschema.js
new file mode 100644
index 0000000..b59cbce
--- /dev/null
+++ b/language-server/src/features/codeAction/extractSubschema.js
@@ -0,0 +1,115 @@
+import {
+  CodeActionKind,
+  TextDocumentEdit
+} from "vscode-languageserver";
+import { getKeywordName } from "@hyperjump/json-schema/experimental";
+import * as SchemaDocument from "../../model/schema-document.js";
+import * as SchemaNode from "../../model/schema-node.js";
+import * as jsoncParser from "jsonc-parser";
+
+/**
+ * @import { Server } from "../../services/server.js"
+ * @import { Schemas } from "../../services/schemas.js"
+ * @import { CodeAction } from "vscode-languageserver";
+ */
+
+
+export class ExtractSubSchemaToDefs {
+  /**
+   * @param {Server} server
+   * @param {Schemas} schemas
+   */
+  constructor(server, schemas) {
+    this.server = server;
+    this.schemas = schemas;
+    server.onInitialize(() => ({
+      capabilities: {
+        codeActionProvider: true
+      }
+    }));
+
+    // Helper function to format new def using jsonc-parser
+    /** @type (newDefText: string) => string */
+    const formatNewDef = (newDefText) => {
+      try {
+        /** @type {unknown} */
+        const parsedDef = jsoncParser.parse(newDefText);
+        return JSON.stringify(parsedDef, null, 2).replace(/\n/g, "\n    ");
+      } catch {
+        return newDefText;
+      }
+    };
+
+    server.onCodeAction(async ({ textDocument, range }) => {
+      const uri = textDocument.uri;
+      let schemaDocument = await schemas.getOpen(uri);
+      if (!schemaDocument) {
+        return [];
+      }
+
+      const offset = schemaDocument.textDocument.offsetAt(range.start);
+      const node = SchemaDocument.findNodeAtOffset(schemaDocument, offset);
+      if (!node?.isSchema) {
+        return [];
+      }
+      let definitionsNode;
+      for (const schemaNode of SchemaNode.allNodes(node.root)) {
+        if (schemaNode.keywordUri === "https://json-schema.org/keyword/definitions") {
+          definitionsNode = schemaNode;
+          break;
+        }
+      }
+      let highestDefNumber = 0;
+      if (definitionsNode) {
+        const defsContent = schemaDocument.textDocument.getText().slice(
+          definitionsNode.offset,
+          definitionsNode.offset + definitionsNode.textLength
+        );
+        const defMatches = [...defsContent.matchAll(/"def(\d+)":/g)];
+        defMatches.forEach((match) =>
+          highestDefNumber = Math.max(highestDefNumber, parseInt(match[1], 10))
+        );
+      }
+      let newDefName = `def${highestDefNumber + 1}`;
+      const extractedDef = schemaDocument.textDocument.getText(range);
+      const newFormattedDef = formatNewDef(extractedDef);
+      let defName = getKeywordName(
+        /** @type {string} */ (node.root.dialectUri),
+        "https://json-schema.org/keyword/definitions"
+      );
+
+      /** @type {CodeAction} */
+      const codeAction = {
+        title: `Extract subschema to ${defName}`,
+        kind: CodeActionKind.RefactorExtract,
+        edit: {
+          documentChanges: [
+            TextDocumentEdit.create({ uri: textDocument.uri, version: null }, [
+              {
+                range: range,
+                newText: `{ "$ref": "#/${defName}/${newDefName}" }`
+              },
+              definitionsNode
+                ? {
+                    range: {
+                      start: schemaDocument.textDocument.positionAt(definitionsNode.offset + 1),
+                      end: schemaDocument.textDocument.positionAt(definitionsNode.offset + 1)
+                    },
+                    newText: `\n    "${newDefName}": ${newFormattedDef},`
+                  }
+                : {
+                    range: {
+                      start: schemaDocument.textDocument.positionAt(node.root.offset + node.root.textLength - 2),
+                      end: schemaDocument.textDocument.positionAt(node.root.offset + node.root.textLength - 2)
+                    },
+                    newText: `,\n  "${defName}": {\n    "${newDefName}": ${newFormattedDef}\n  }`
+                  }
+            ])
+          ]
+        }
+      };
+
+      return [codeAction];
+    });
+  }
+}