diff --git a/crates/ide-assists/src/handlers/extract_string.rs b/crates/ide-assists/src/handlers/extract_string.rs
new file mode 100644
index 000000000000..2b455820446a
--- /dev/null
+++ b/crates/ide-assists/src/handlers/extract_string.rs
@@ -0,0 +1,277 @@
+use ide_db::syntax_helpers::format_string::is_format_string;
+use syntax::{
+    AstToken, NodeOrToken, T, TextRange,
+    ast::{self, AstNode, IsString, edit::IndentLevel, syntax_factory::SyntaxFactory},
+    syntax_editor::Position,
+};
+
+use crate::{AssistContext, AssistId, Assists};
+
+// Assist: extract_string
+//
+// Extract substring inside format string.
+//
+// ```
+// //- minicore: fmt
+// fn main() {
+//     let out = format_args!("foo$0bar$0");
+// }
+// ```
+// ->
+// ```
+// fn main() {
+//     let new_str = "bar";
+//     let out = format_args!("foo{new_str}");
+// }
+// ```
+pub(crate) fn extract_string(acc: &mut Assists, ctx: &AssistContext<'_>) -> Option<()> {
+    let tok = ctx.find_token_at_offset::<ast::String>()?;
+
+    if ctx.has_empty_selection() {
+        return None;
+    }
+    if !tok.text_range_between_quotes()?.contains_range(ctx.selection_trimmed()) {
+        return None;
+    }
+
+    let (left, extract, right) = split_selection(&tok, ctx.selection_trimmed())?;
+    if ![left, extract, right].into_iter().all(is_valid_string) {
+        cov_mark::hit!(extract_string_invalid_format_string);
+        return None;
+    }
+    let is_format_string = ctx
+        .sema
+        .descend_into_macros(tok.syntax().clone())
+        .into_iter()
+        .filter_map(ast::String::cast)
+        .any(|it| is_format_string(&it));
+    if !is_format_string {
+        cov_mark::hit!(extract_string_not_a_format_string);
+        return None;
+    }
+    let (open_quote, close_quote) = quotes(&tok)?;
+    let insert_before = tok
+        .syntax()
+        .parent_ancestors()
+        .find(|it| it.parent().is_some_and(|parent| ast::StmtList::can_cast(parent.kind())))?;
+
+    acc.add(
+        AssistId::refactor_extract("extract_string"),
+        "Extract substring",
+        tok.syntax().text_range(),
+        |builder| {
+            let mut edit = builder.make_editor(&insert_before);
+            let make = SyntaxFactory::with_mappings();
+            let indent = IndentLevel::from_node(&insert_before);
+
+            let var = "new_str";
+            let extracted_lit = format!("{open_quote}{extract}{close_quote}");
+            let needs_format_args = extract.contains(['{', '}']);
+
+            let initializer = if needs_format_args {
+                let literal = make.expr_literal(&extracted_lit).token();
+                let tt = make.token_tree(T!['('], [NodeOrToken::Token(literal)]);
+                make.expr_macro(make.ident_path("format_args"), tt).into()
+            } else {
+                make.expr_literal(&extracted_lit).into()
+            };
+            let let_stmt = make.let_stmt(
+                make.ident_pat(false, false, make.name(var)).into(),
+                None,
+                Some(initializer),
+            );
+
+            edit.insert_all(
+                Position::before(insert_before),
+                vec![
+                    let_stmt.syntax().clone().into(),
+                    make.whitespace(&format!("\n{indent}")).into(),
+                ],
+            );
+            edit.replace(
+                tok.syntax(),
+                make.expr_literal(&format!("{left}{{{var}}}{right}")).token(),
+            );
+
+            edit.add_mappings(make.finish_with_mappings());
+            builder.add_file_edits(ctx.vfs_file_id(), edit);
+        },
+    )
+}
+
+fn split_selection(tok: &ast::String, selection: TextRange) -> Option<(&str, &str, &str)> {
+    let raw_range = tok.syntax().text_range();
+    let range = raw_range.checked_sub(raw_range.start())?;
+    let selection = selection.checked_sub(raw_range.start())?;
+
+    let left = &tok.text()[TextRange::new(range.start(), selection.start())];
+    let right = &tok.text()[TextRange::new(selection.end(), range.end())];
+    let extract = &tok.text()[selection];
+
+    Some((left, extract, right))
+}
+
+fn quotes(tok: &ast::String) -> Option<(&str, &str)> {
+    let start = tok.syntax().text_range().start();
+    let text = tok.text();
+
+    let open = tok.open_quote_text_range()?.checked_sub(start)?;
+    let close = tok.open_quote_text_range()?.checked_sub(start)?;
+
+    Some((&text[open], &text[close]))
+}
+
+fn is_valid_string(s: &str) -> bool {
+    let backslash_count = s.len() - s.trim_end_matches('\\').len();
+    if backslash_count % 2 == 1 {
+        return false;
+    }
+    is_valid_format_string(s)
+}
+
+fn is_valid_format_string(s: &str) -> bool {
+    let mut chars = s.chars().peekable();
+    let is_ident = |&ch: &char| !ch.is_ascii() || ch.is_ascii_alphanumeric() || ch == '_';
+
+    while let Some(ch) = chars.next() {
+        match (ch, chars.peek()) {
+            ('{', Some('{')) | ('}', Some('}')) => {
+                chars.next();
+            }
+            ('}', _) => return false,
+            ('{', _) => {
+                while chars.next_if(is_ident).is_some() {}
+
+                if chars.next().is_none_or(|ch| ch != '}') {
+                    return false;
+                }
+            }
+            _ => (),
+        }
+    }
+    true
+}
+
+#[cfg(test)]
+mod tests {
+    use crate::tests::{check_assist, check_assist_not_applicable};
+
+    use super::*;
+
+    #[test]
+    fn extract_to_format_args() {
+        check_assist(
+            extract_string,
+            r#"
+//- minicore: fmt
+fn main() {
+    let n = 2;
+    let out = format_args!("foo$0bar{n}$0");
+}"#,
+            r#"
+fn main() {
+    let n = 2;
+    let new_str = format_args!("bar{n}");
+    let out = format_args!("foo{new_str}");
+}"#,
+        );
+    }
+
+    #[test]
+    fn extract_escaped_braces() {
+        check_assist(
+            extract_string,
+            r#"
+//- minicore: fmt
+fn main() {
+    let out = format_args!("foo$0bar{{n$0");
+}"#,
+            r#"
+fn main() {
+    let new_str = format_args!("bar{{n");
+    let out = format_args!("foo{new_str}");
+}"#,
+        );
+    }
+
+    #[test]
+    fn extract_escaped_backslashes() {
+        check_assist(
+            extract_string,
+            r#"
+//- minicore: fmt
+fn main() {
+    let out = format_args!("foo$0bar\\n$0");
+}"#,
+            r#"
+fn main() {
+    let new_str = "bar\\n";
+    let out = format_args!("foo{new_str}");
+}"#,
+        );
+    }
+
+    #[test]
+    fn extract_with_tails() {
+        check_assist(
+            extract_string,
+            r#"
+//- minicore: fmt
+fn main() {
+    let n = 2;
+    let out = format_args!("foo$0bar{n}$0tail");
+}"#,
+            r#"
+fn main() {
+    let n = 2;
+    let new_str = format_args!("bar{n}");
+    let out = format_args!("foo{new_str}tail");
+}"#,
+        );
+    }
+
+    #[test]
+    fn invalid_format_string() {
+        cov_mark::check_count!(extract_string_invalid_format_string, 3);
+        check_assist_not_applicable(
+            extract_string,
+            r#"
+//- minicore: fmt
+fn main() {
+    let n = 2;
+    let out = format_args!("foo$0bar{$0n}tail");
+}"#,
+        );
+        check_assist_not_applicable(
+            extract_string,
+            r#"
+//- minicore: fmt
+fn main() {
+    let n = 2;
+    let out = format_args!("foo$0bar{n$0}tail");
+}"#,
+        );
+        check_assist_not_applicable(
+            extract_string,
+            r#"
+//- minicore: fmt
+fn main() {
+    let n = 2;
+    let out = format_args!("foobar{n$0}ta$0il");
+}"#,
+        );
+    }
+
+    #[test]
+    fn not_a_format_string() {
+        cov_mark::check!(extract_string_not_a_format_string);
+        check_assist_not_applicable(
+            extract_string,
+            r#"
+fn main() {
+    let n = 2;
+    let out = not_format!("foob$0ar{n}ta$0il");
+}"#,
+        );
+    }
+}
diff --git a/crates/ide-assists/src/lib.rs b/crates/ide-assists/src/lib.rs
index 47cb4c8e74cb..ab125770684a 100644
--- a/crates/ide-assists/src/lib.rs
+++ b/crates/ide-assists/src/lib.rs
@@ -147,6 +147,7 @@ mod handlers {
     mod extract_expressions_from_format_string;
     mod extract_function;
     mod extract_module;
+    mod extract_string;
     mod extract_struct_from_enum_variant;
     mod extract_type_alias;
     mod extract_variable;
@@ -284,6 +285,7 @@ mod handlers {
             expand_glob_import::expand_glob_reexport,
             expand_rest_pattern::expand_rest_pattern,
             extract_expressions_from_format_string::extract_expressions_from_format_string,
+            extract_string::extract_string,
             extract_struct_from_enum_variant::extract_struct_from_enum_variant,
             extract_type_alias::extract_type_alias,
             fix_visibility::fix_visibility,
diff --git a/crates/ide-assists/src/tests/generated.rs b/crates/ide-assists/src/tests/generated.rs
index 7eef257b95f1..e6cf8c908778 100644
--- a/crates/ide-assists/src/tests/generated.rs
+++ b/crates/ide-assists/src/tests/generated.rs
@@ -1261,6 +1261,25 @@ fn main() {
     )
 }
 
+#[test]
+fn doctest_extract_string() {
+    check_doc_test(
+        "extract_string",
+        r#####"
+//- minicore: fmt
+fn main() {
+    let out = format_args!("foo$0bar$0");
+}
+"#####,
+        r#####"
+fn main() {
+    let new_str = "bar";
+    let out = format_args!("foo{new_str}");
+}
+"#####,
+    )
+}
+
 #[test]
 fn doctest_extract_struct_from_enum_variant() {
     check_doc_test(