diff --git a/crates/assists/src/handlers/extract_function.rs b/crates/assists/src/handlers/extract_function.rs
index dce7ffd7b12..93ff66b246b 100644
--- a/crates/assists/src/handlers/extract_function.rs
+++ b/crates/assists/src/handlers/extract_function.rs
@@ -60,115 +60,21 @@ pub(crate) fn extract_function(acc: &mut Assists, ctx: &AssistContext) -> Option
         return None;
     }
 
-    let node = match node {
-        syntax::NodeOrToken::Node(n) => n,
-        syntax::NodeOrToken::Token(t) => t.parent(),
-    };
+    let node = element_to_node(node);
 
-    let mut body = None;
-    if node.text_range() == ctx.frange.range {
-        body = FunctionBody::from_whole_node(node.clone());
-    }
-    if body.is_none() && node.kind() == BLOCK_EXPR {
-        body = FunctionBody::from_range(&node, ctx.frange.range);
-    }
-    if let Some(parent) = node.parent() {
-        if body.is_none() && parent.kind() == BLOCK_EXPR {
-            body = FunctionBody::from_range(&parent, ctx.frange.range);
-        }
-    }
-    if body.is_none() {
-        body = FunctionBody::from_whole_node(node.clone());
-    }
-    if body.is_none() {
-        body = node.ancestors().find_map(FunctionBody::from_whole_node);
-    }
-    let body = body?;
+    let body = extraction_target(&node, ctx.frange.range)?;
 
     let vars_used_in_body = vars_used_in_body(&body, &ctx);
-    let mut self_param = None;
-    let param_pats: Vec<_> = vars_used_in_body
-        .iter()
-        .map(|node| (node, node.source(ctx.db())))
-        .filter(|(_, src)| {
-            src.file_id.original_file(ctx.db()) == ctx.frange.file_id
-                && !body.contains_node(&either_syntax(&src.value))
-        })
-        .filter_map(|(&node, src)| match src.value {
-            Either::Left(_) => Some(node),
-            Either::Right(it) => {
-                // we filter self param, as there can only be one
-                self_param = Some((node, it));
-                None
-            }
-        })
-        .collect();
+    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 = body.scope_for_fn_insertion(anchor)?;
+    let insert_after = scope_for_fn_insertion(&body, anchor)?;
     let module = ctx.sema.scope(&insert_after).module()?;
 
-    let vars_defined_in_body = vars_defined_in_body(&body, ctx);
+    let vars_defined_in_body_and_outlive = vars_defined_in_body_and_outlive(ctx, &body);
+    let ret_ty = body_return_ty(ctx, &body)?;
 
-    let vars_defined_in_body_and_outlive: Vec<_> = vars_defined_in_body
-        .iter()
-        .copied()
-        .filter(|node| {
-            let usages = Definition::Local(*node)
-                .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))
-        })
-        .collect();
-
-    let params: Vec<_> = param_pats
-        .into_iter()
-        .map(|node| {
-            let usages = Definition::Local(node)
-                .usages(&ctx.sema)
-                .in_scope(SearchScope::single_file(ctx.frange.file_id))
-                .all();
-
-            let has_usages_afterwards = usages
-                .iter()
-                .flat_map(|(_, rs)| rs.iter())
-                .any(|reference| body.preceedes_range(reference.range));
-            let has_mut_inside_body = usages
-                .iter()
-                .flat_map(|(_, rs)| rs.iter())
-                .filter(|reference| body.contains_range(reference.range))
-                .any(|reference| {
-                    if reference.access == Some(ReferenceAccess::Write) {
-                        return true;
-                    }
-
-                    let path = path_at_offset(&body, reference);
-                    if is_mut_ref_expr(path.as_ref()).unwrap_or(false) {
-                        return true;
-                    }
-
-                    if is_mut_method_call(ctx, path.as_ref()).unwrap_or(false) {
-                        return true;
-                    }
-
-                    false
-                });
-
-            Param { node, has_usages_afterwards, has_mut_inside_body, is_copy: true }
-        })
-        .collect();
-
-    let expr = body.tail_expr();
-    let ret_ty = match expr {
-        Some(expr) => Some(ctx.sema.type_of_expr(&expr)?),
-        None => None,
-    };
-
-    let has_unit_ret = ret_ty.as_ref().map_or(true, |it| it.is_unit());
-    if stdx::never!(!vars_defined_in_body_and_outlive.is_empty() && !has_unit_ret) {
+    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;
     }
@@ -183,6 +89,8 @@ pub(crate) fn extract_function(acc: &mut Assists, ctx: &AssistContext) -> Option
         "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),
@@ -203,65 +111,19 @@ pub(crate) fn extract_function(acc: &mut Assists, ctx: &AssistContext) -> Option
     )
 }
 
-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 local in vs {
-                format_to!(buf, ", {}", local.name(ctx.db()).unwrap());
-            }
-            buf.push_str(") = ");
-        }
-    }
-
-    if fun.self_param.is_some() {
-        format_to!(buf, "self.");
-    }
-    format_to!(buf, "{}(", fun.name);
-    {
-        let mut it = fun.params.iter();
-        if let Some(param) = it.next() {
-            format_to!(buf, "{}{}", param.value_prefix(), param.node.name(ctx.db()).unwrap());
-        }
-        for param in it {
-            format_to!(buf, ", {}{}", param.value_prefix(), param.node.name(ctx.db()).unwrap());
-        }
-    }
-    format_to!(buf, ")");
-
-    if fun.has_unit_ret() {
-        format_to!(buf, ";");
-    }
-
-    buf
-}
-
+#[derive(Debug)]
 struct Function {
     name: String,
     self_param: Option<ast::SelfParam>,
     params: Vec<Param>,
-    ret_ty: Option<hir::Type>,
+    ret_ty: RetType,
     body: FunctionBody,
     vars_defined_in_body_and_outlive: Vec<Local>,
 }
 
-impl Function {
-    fn has_unit_ret(&self) -> bool {
-        match &self.ret_ty {
-            Some(ty) => ty.is_unit(),
-            None => true,
-        }
-    }
-}
-
 #[derive(Debug)]
 struct Param {
-    node: Local,
+    var: Local,
     has_usages_afterwards: bool,
     has_mut_inside_body: bool,
     is_copy: bool,
@@ -293,8 +155,7 @@ fn kind(&self) -> ParamKind {
 
     fn value_prefix(&self) -> &'static str {
         match self.kind() {
-            ParamKind::Value => "",
-            ParamKind::MutValue => "",
+            ParamKind::Value | ParamKind::MutValue => "",
             ParamKind::SharedRef => "&",
             ParamKind::MutRef => "&mut ",
         }
@@ -302,8 +163,7 @@ fn value_prefix(&self) -> &'static str {
 
     fn type_prefix(&self) -> &'static str {
         match self.kind() {
-            ParamKind::Value => "",
-            ParamKind::MutValue => "",
+            ParamKind::Value | ParamKind::MutValue => "",
             ParamKind::SharedRef => "&",
             ParamKind::MutRef => "&mut ",
         }
@@ -317,186 +177,27 @@ fn mut_pattern(&self) -> &'static str {
     }
 }
 
-fn format_function(
-    ctx: &AssistContext,
-    module: hir::Module,
-    fun: &Function,
-    indent: IndentLevel,
-) -> String {
-    let mut fn_def = String::new();
-    format_to!(fn_def, "\n\n{}fn $0{}(", indent, fun.name);
-    {
-        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_to!(
-                fn_def,
-                "{}{}: {}{}",
-                param.mut_pattern(),
-                param.node.name(ctx.db()).unwrap(),
-                param.type_prefix(),
-                format_type(&param.node.ty(ctx.db()), ctx, module)
-            );
-        }
-        for param in it {
-            format_to!(
-                fn_def,
-                ", {}{}: {}{}",
-                param.mut_pattern(),
-                param.node.name(ctx.db()).unwrap(),
-                param.type_prefix(),
-                format_type(&param.node.ty(ctx.db()), ctx, module)
-            );
+#[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,
         }
     }
 
-    format_to!(fn_def, ")");
-    if !fun.has_unit_ret() {
-        if let Some(ty) = &fun.ret_ty {
-            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 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),
         }
     }
-    fn_def.push_str(" {");
-
-    match &fun.body {
-        FunctionBody::Expr(expr) => {
-            fn_def.push('\n');
-            let expr = expr.indent(indent);
-            let expr = fix_param_usages(ctx, &fun.params, expr.syntax());
-            format_to!(fn_def, "{}{}", indent + 1, expr);
-            fn_def.push('\n');
-        }
-        FunctionBody::Span { elements, leading_indent } => {
-            format_to!(fn_def, "{}", leading_indent);
-            for element in elements {
-                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", indent + 1, var.name(ctx.db()).unwrap()),
-        [v0, vs @ ..] => {
-            format_to!(fn_def, "{}({}", 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");
-        }
-    }
-
-    format_to!(fn_def, "{}}}", indent);
-
-    fn_def
-}
-
-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())
-}
-
-fn path_at_offset(body: &FunctionBody, reference: &FileReference) -> Option<ast::Expr> {
-    let var = body.token_at_offset(reference.range.start()).right_biased()?;
-    let path = var.ancestors().find_map(ast::Expr::cast)?;
-    stdx::always!(matches!(path, ast::Expr::PathExpr(_)));
-    Some(path)
-}
-
-fn is_mut_ref_expr(path: Option<&ast::Expr>) -> Option<bool> {
-    let path = path?;
-    let ref_expr = path.syntax().parent().and_then(ast::RefExpr::cast)?;
-    Some(ref_expr.mut_token().is_some())
-}
-
-fn is_mut_method_call(ctx: &AssistContext, path: Option<&ast::Expr>) -> Option<bool> {
-    let path = path?;
-    let method_call = path.syntax().parent().and_then(ast::MethodCallExpr::cast)?;
-
-    let func = ctx.sema.resolve_method_call(&method_call)?;
-    let self_param = func.self_param(ctx.db())?;
-    let access = self_param.access(ctx.db());
-
-    Some(matches!(access, hir::Access::Exclusive))
-}
-
-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 = Definition::Local(param.node)
-            .usages(&ctx.sema)
-            .in_scope(SearchScope::single_file(ctx.frange.file_id))
-            .all();
-        let usages = usages
-            .iter()
-            .flat_map(|(_, rs)| rs.iter())
-            .filter(|reference| syntax.text_range().contains_range(reference.range));
-        for reference in usages {
-            let token = match syntax.token_at_offset(reference.range.start()).right_biased() {
-                Some(a) => a,
-                None => {
-                    stdx::never!(false, "cannot find token at variable usage: {:?}", reference);
-                    continue;
-                }
-            };
-            let path = match token.ancestors().find_map(ast::Expr::cast) {
-                Some(n) => n,
-                None => {
-                    stdx::never!(false, "cannot find path parent of variable usage: {:?}", token);
-                    continue;
-                }
-            };
-            stdx::always!(matches!(path, ast::Expr::PathExpr(_)));
-            match path.syntax().ancestors().skip(1).find_map(ast::Expr::cast) {
-                Some(ast::Expr::MethodCallExpr(_)) => {
-                    // 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)
 }
 
 #[derive(Debug)]
@@ -505,11 +206,6 @@ enum FunctionBody {
     Span { elements: Vec<SyntaxElement>, leading_indent: String },
 }
 
-enum Anchor {
-    Freestanding,
-    Method,
-}
-
 impl FunctionBody {
     fn from_whole_node(node: SyntaxNode) -> Option<Self> {
         match node.kind() {
@@ -568,16 +264,6 @@ fn tail_expr(&self) -> Option<ast::Expr> {
         }
     }
 
-    fn scope_for_fn_insertion(&self, anchor: Anchor) -> Option<SyntaxNode> {
-        match self {
-            FunctionBody::Expr(e) => scope_for_fn_insertion(e.syntax(), anchor),
-            FunctionBody::Span { elements, .. } => {
-                let node = elements.iter().find_map(|e| e.as_node())?;
-                scope_for_fn_insertion(&node, anchor)
-            }
-        }
-    }
-
     fn descendants(&self) -> impl Iterator<Item = SyntaxNode> + '_ {
         match self {
             FunctionBody::Expr(expr) => Either::Right(expr.syntax().descendants()),
@@ -590,6 +276,30 @@ fn descendants(&self) -> impl Iterator<Item = SyntaxNode> + '_ {
         }
     }
 
+    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),
@@ -621,31 +331,278 @@ fn token_at_offset(&self, offset: TextSize) -> TokenAtOffset<SyntaxToken> {
             }
         }
     }
+}
 
-    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())
+fn element_to_node(node: SyntaxElement) -> SyntaxNode {
+    match node {
+        syntax::NodeOrToken::Node(n) => n,
+        syntax::NodeOrToken::Token(t) => t.parent(),
     }
 }
 
-fn scope_for_fn_insertion(node: &SyntaxNode, anchor: Anchor) -> Option<SyntaxNode> {
+fn extraction_target(node: &SyntaxNode, selection_range: TextRange) -> Option<FunctionBody> {
+    if node.text_range() == selection_range {
+        let body = FunctionBody::from_whole_node(node.clone());
+        if body.is_some() {
+            return body;
+        }
+    }
+
+    if node.kind() == BLOCK_EXPR {
+        let body = FunctionBody::from_range(&node, selection_range);
+        if body.is_some() {
+            return body;
+        }
+    }
+    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;
+            }
+        }
+    }
+
+    let body = FunctionBody::from_whole_node(node.clone());
+    if body.is_some() {
+        return body;
+    }
+
+    let body = node.ancestors().find_map(FunctionBody::from_whole_node);
+    if body.is_some() {
+        return body;
+    }
+
+    None
+}
+
+/// Returns a vector of local variables that are referenced in `body`
+fn vars_used_in_body(body: &FunctionBody, ctx: &AssistContext) -> Vec<Local> {
+    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()
+}
+
+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
+}
+
+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);
+            Param {
+                var,
+                has_usages_afterwards: has_usages_after_body(&usages, body),
+                has_mut_inside_body: has_exclusive_usages(ctx, &usages, body),
+                is_copy: true,
+            }
+        })
+        .collect()
+}
+
+fn has_usages_after_body(usages: &LocalUsages, body: &FunctionBody) -> bool {
+    usages.iter().any(|reference| body.preceedes_range(reference.range))
+}
+
+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))
+}
+
+fn reference_is_exclusive(
+    reference: &FileReference,
+    body: &FunctionBody,
+    ctx: &AssistContext,
+) -> bool {
+    if reference.access == Some(ReferenceAccess::Write) {
+        return true;
+    }
+
+    let path = path_at_offset(body, reference);
+    if is_mut_ref_expr(path.as_ref()).unwrap_or(false) {
+        return true;
+    }
+
+    if is_mut_method_call(ctx, path.as_ref()).unwrap_or(false) {
+        return true;
+    }
+
+    false
+}
+
+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)
+    }
+}
+
+fn path_at_offset(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)
+}
+
+fn is_mut_ref_expr(path: Option<&ast::Expr>) -> Option<bool> {
+    let path = path?;
+    let ref_expr = path.syntax().parent().and_then(ast::RefExpr::cast)?;
+    Some(ref_expr.mut_token().is_some())
+}
+
+fn is_mut_method_call(ctx: &AssistContext, path: Option<&ast::Expr>) -> Option<bool> {
+    let path = path?;
+    let method_call = path.syntax().parent().and_then(ast::MethodCallExpr::cast)?;
+
+    let func = ctx.sema.resolve_method_call(&method_call)?;
+    let self_param = func.self_param(ctx.db())?;
+    let access = self_param.access(ctx.db());
+
+    Some(matches!(access, hir::Access::Exclusive))
+}
+
+/// Returns a vector of local variables that are defined in `body`
+fn vars_defined_in_body(body: &FunctionBody, ctx: &AssistContext) -> Vec<Local> {
+    body.descendants()
+        .filter_map(ast::IdentPat::cast)
+        .filter_map(|let_stmt| ctx.sema.to_def(&let_stmt))
+        .unique()
+        .collect()
+}
+
+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
+}
+
+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(),
+    }
+}
+
+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),
+    }
+}
+#[derive(Debug)]
+enum Anchor {
+    Freestanding,
+    Method,
+}
+
+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() {
@@ -674,34 +631,207 @@ fn scope_for_fn_insertion(node: &SyntaxNode, anchor: Anchor) -> Option<SyntaxNod
     last_ancestor
 }
 
-fn either_syntax(value: &Either<ast::IdentPat, ast::SelfParam>) -> &SyntaxNode {
-    match value {
-        Either::Left(pat) => pat.syntax(),
-        Either::Right(it) => it.syntax(),
+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);
     }
 }
 
-/// Returns a vector of local variables that are referenced in `body`
-fn vars_used_in_body(body: &FunctionBody, ctx: &AssistContext) -> Vec<Local> {
-    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()
+fn format_arg_to(buf: &mut String, ctx: &AssistContext, param: &Param) {
+    format_to!(buf, "{}{}", param.value_prefix(), param.var.name(ctx.db()).unwrap());
 }
 
-/// Returns a vector of local variables that are defined in `body`
-fn vars_defined_in_body(body: &FunctionBody, ctx: &AssistContext) -> Vec<Local> {
-    body.descendants()
-        .filter_map(ast::IdentPat::cast)
-        .filter_map(|let_stmt| ctx.sema.to_def(&let_stmt))
-        .unique()
-        .collect()
+fn format_function(
+    ctx: &AssistContext,
+    module: hir::Module,
+    fun: &Function,
+    indent: IndentLevel,
+) -> String {
+    let mut fn_def = String::new();
+    format_to!(fn_def, "\n\n{}fn $0{}(", 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, indent, fun);
+    format_to!(fn_def, "{}}}", 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.var.ty(ctx.db()), 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,
+    indent: IndentLevel,
+    fun: &Function,
+) {
+    match &fun.body {
+        FunctionBody::Expr(expr) => {
+            fn_def.push('\n');
+            let expr = expr.indent(indent);
+            let expr = fix_param_usages(ctx, &fun.params, expr.syntax());
+            format_to!(fn_def, "{}{}", indent + 1, expr);
+            fn_def.push('\n');
+        }
+        FunctionBody::Span { elements, leading_indent } => {
+            format_to!(fn_def, "{}", leading_indent);
+            for element in elements {
+                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", indent + 1, var.name(ctx.db()).unwrap()),
+        [v0, vs @ ..] => {
+            format_to!(fn_def, "{}({}", 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())
+}
+
+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_at_offset(syntax, reference));
+        for path in usages {
+            match path.syntax().ancestors().skip(1).find_map(ast::Expr::cast) {
+                Some(ast::Expr::MethodCallExpr(_)) => {
+                    // 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)]