diff --git a/src/services/refactors/extractSymbol.ts b/src/services/refactors/extractSymbol.ts
index 950bb078e06..859f7e1d3cc 100644
--- a/src/services/refactors/extractSymbol.ts
+++ b/src/services/refactors/extractSymbol.ts
@@ -1006,11 +1006,14 @@ namespace ts.refactor.extractSymbol {
         const localNameText = getUniqueName(isClassLike(scope) ? "newProperty" : "newLocal", file);
         const isJS = isInJSFile(scope);
 
-        const variableType = isJS || !checker.isContextSensitive(node)
+        let variableType = isJS || !checker.isContextSensitive(node)
             ? undefined
             : checker.typeToTypeNode(checker.getContextualType(node)!, scope, NodeBuilderFlags.NoTruncation); // TODO: GH#18217
 
-        const initializer = transformConstantInitializer(node, substitutions);
+        let initializer = transformConstantInitializer(node, substitutions);
+
+        ({ variableType, initializer } = transformFunctionInitializerAndType(variableType, initializer));
+
         suppressLeadingAndTrailingTrivia(initializer);
 
         const changeTracker = textChanges.ChangeTracker.fromContext(context);
@@ -1102,6 +1105,73 @@ namespace ts.refactor.extractSymbol {
         const renameFilename = node.getSourceFile().fileName;
         const renameLocation = getRenameLocation(edits, renameFilename, localNameText, /*isDeclaredBeforeUse*/ true);
         return { renameFilename, renameLocation, edits };
+
+        function transformFunctionInitializerAndType(variableType: TypeNode | undefined, initializer: Expression): { variableType: TypeNode | undefined, initializer: Expression } {
+            // If no contextual type exists there is nothing to transfer to the function signature
+            if (variableType === undefined) return { variableType, initializer };
+            // Only do this for function expressions and arrow functions that are not generic
+            if (!isFunctionExpression(initializer) && !isArrowFunction(initializer) || !!initializer.typeParameters) return { variableType, initializer };
+            const functionType = checker.getTypeAtLocation(node);
+            const functionSignature = singleOrUndefined(checker.getSignaturesOfType(functionType, SignatureKind.Call));
+
+            // If no function signature, maybe there was an error, do nothing
+            if (!functionSignature) return { variableType, initializer };
+            // If the function signature has generic type parameters we don't attempt to move the parameters
+            if (!!functionSignature.getTypeParameters()) return { variableType, initializer };
+
+            // We add parameter types if needed
+            const parameters: ParameterDeclaration[] = [];
+            let hasAny = false;
+            for (const p of initializer.parameters) {
+                if (p.type) {
+                    parameters.push(p);
+                }
+                else {
+                    const paramType = checker.getTypeAtLocation(p);
+                    if (paramType === checker.getAnyType()) hasAny = true;
+
+                    parameters.push(updateParameter(p,
+                        p.decorators, p.modifiers, p.dotDotDotToken,
+                        p.name, p.questionToken, p.type || checker.typeToTypeNode(paramType, scope, NodeBuilderFlags.NoTruncation), p.initializer));
+                }
+            }
+            // If a parameter was inferred as any we skip adding function parameters at all.
+            // Turning an implicit any (which under common settings is a error) to an explicit
+            // is probably actually a worse refactor outcome.
+            if (hasAny) return { variableType, initializer };
+            variableType = undefined;
+            if (isArrowFunction(initializer)) {
+                initializer = updateArrowFunction(initializer, node.modifiers, initializer.typeParameters,
+                    parameters,
+                    initializer.type || checker.typeToTypeNode(functionSignature.getReturnType(), scope, NodeBuilderFlags.NoTruncation),
+                    initializer.equalsGreaterThanToken,
+                    initializer.body);
+            }
+            else {
+                if (functionSignature && !!functionSignature.thisParameter) {
+                    const firstParameter = firstOrUndefined(parameters);
+                    // If the function signature has a this parameter and if the first defined parameter is not the this parameter, we must add it
+                    // Note: If this parameter was already there, it would have been previously updated with the type if not type was present
+                    if ((!firstParameter || (isIdentifier(firstParameter.name) && firstParameter.name.escapedText !== "this"))) {
+                        const thisType = checker.getTypeOfSymbolAtLocation(functionSignature.thisParameter, node);
+                        parameters.splice(0, 0, createParameter(
+                            /* decorators */ undefined,
+                            /* modifiers */ undefined,
+                            /* dotDotDotToken */ undefined,
+                            "this",
+                            /* questionToken */ undefined,
+                            checker.typeToTypeNode(thisType, scope, NodeBuilderFlags.NoTruncation)
+                        ));
+                    }
+                }
+                initializer = updateFunctionExpression(initializer, node.modifiers, initializer.asteriskToken,
+                    initializer.name, initializer.typeParameters,
+                    parameters,
+                    initializer.type || checker.typeToTypeNode(functionSignature.getReturnType(), scope, NodeBuilderFlags.NoTruncation),
+                    initializer.body);
+            }
+            return { variableType, initializer };
+        }
     }
 
     function getContainingVariableDeclarationIfInList(node: Node, scope: Scope) {
diff --git a/tests/baselines/reference/extractConstant/extractConstant_ContextualType_Lambda.ts b/tests/baselines/reference/extractConstant/extractConstant_ContextualType_Lambda.ts
index d5a5a55bc27..fae0a6812cd 100644
--- a/tests/baselines/reference/extractConstant/extractConstant_ContextualType_Lambda.ts
+++ b/tests/baselines/reference/extractConstant/extractConstant_ContextualType_Lambda.ts
@@ -5,7 +5,7 @@ const myObj: { member(x: number, y: string): void } = {
 }
 
 // ==SCOPE::Extract to constant in enclosing scope==
-const newLocal: (x: number, y: string) => void = (x, y) => x + y;
+const newLocal = (x: number, y: string): string => x + y;
 const myObj: { member(x: number, y: string): void } = {
     member: /*RENAME*/newLocal,
 }
diff --git a/tests/cases/fourslash/extract-const-callback-function-generic.ts b/tests/cases/fourslash/extract-const-callback-function-generic.ts
new file mode 100644
index 00000000000..cafba8f8245
--- /dev/null
+++ b/tests/cases/fourslash/extract-const-callback-function-generic.ts
@@ -0,0 +1,15 @@
+/// <reference path='fourslash.ts' />
+
+////declare function fnUnion(fn: <T>(a: T) => T): void
+////fnUnion(/*a*/a => a/*b*/);
+
+goTo.select("a", "b");
+edit.applyRefactor({
+    refactorName: "Extract Symbol",
+    actionName: "constant_scope_0",
+    actionDescription: "Extract to constant in enclosing scope",
+    newContent:
+`declare function fnUnion(fn: <T>(a: T) => T): void
+const newLocal: <T>(a: T) => T = a => a;
+fnUnion(/*RENAME*/newLocal);`
+});
\ No newline at end of file
diff --git a/tests/cases/fourslash/extract-const-callback-function-no-context1.ts b/tests/cases/fourslash/extract-const-callback-function-no-context1.ts
new file mode 100644
index 00000000000..4bd09076868
--- /dev/null
+++ b/tests/cases/fourslash/extract-const-callback-function-no-context1.ts
@@ -0,0 +1,15 @@
+/// <reference path='fourslash.ts' />
+
+////declare function fnUnion(fn: ((a: number) => number) | ((a: string) => string)): void
+////fnUnion(/*a*/(a: any) => a/*b*/);
+
+goTo.select("a", "b");
+edit.applyRefactor({
+    refactorName: "Extract Symbol",
+    actionName: "constant_scope_0",
+    actionDescription: "Extract to constant in enclosing scope",
+    newContent:
+`declare function fnUnion(fn: ((a: number) => number) | ((a: string) => string)): void
+const newLocal = (a: any) => a;
+fnUnion(/*RENAME*/newLocal);`
+});
diff --git a/tests/cases/fourslash/extract-const-callback-function-no-context2.ts b/tests/cases/fourslash/extract-const-callback-function-no-context2.ts
new file mode 100644
index 00000000000..eb392bcb445
--- /dev/null
+++ b/tests/cases/fourslash/extract-const-callback-function-no-context2.ts
@@ -0,0 +1,15 @@
+/// <reference path='fourslash.ts' />
+
+////declare function fnUnion(fn: ((a: number) => number) | ((a: string) => string)): void
+////fnUnion(/*a*/(a) => a/*b*/);
+
+goTo.select("a", "b");
+edit.applyRefactor({
+    refactorName: "Extract Symbol",
+    actionName: "constant_scope_0",
+    actionDescription: "Extract to constant in enclosing scope",
+    newContent:
+`declare function fnUnion(fn: ((a: number) => number) | ((a: string) => string)): void
+const newLocal: ((a: number) => number) | ((a: string) => string) = (a) => a;
+fnUnion(/*RENAME*/newLocal);`
+});
diff --git a/tests/cases/fourslash/extract-const-callback-function-no-context3.ts b/tests/cases/fourslash/extract-const-callback-function-no-context3.ts
new file mode 100644
index 00000000000..92835d0d38c
--- /dev/null
+++ b/tests/cases/fourslash/extract-const-callback-function-no-context3.ts
@@ -0,0 +1,15 @@
+/// <reference path='fourslash.ts' />
+
+////declare function fnUnion(fn: ((a: number) => number) | ((a: string) => string)): void
+////fnUnion(/*a*/(a: string) => a/*b*/);
+
+goTo.select("a", "b");
+edit.applyRefactor({
+    refactorName: "Extract Symbol",
+    actionName: "constant_scope_0",
+    actionDescription: "Extract to constant in enclosing scope",
+    newContent:
+`declare function fnUnion(fn: ((a: number) => number) | ((a: string) => string)): void
+const newLocal = (a: string) => a;
+fnUnion(/*RENAME*/newLocal);`
+});
diff --git a/tests/cases/fourslash/extract-const-callback-function-rest.ts b/tests/cases/fourslash/extract-const-callback-function-rest.ts
new file mode 100644
index 00000000000..50feb63dd20
--- /dev/null
+++ b/tests/cases/fourslash/extract-const-callback-function-rest.ts
@@ -0,0 +1,18 @@
+/// <reference path='fourslash.ts' />
+
+
+////function fWithRest(fn: (...a: number[]) => number) { }
+////fWithRest(/*a*/(a, b, c) => a + b + c/*b*/);
+
+
+goTo.select("a", "b");
+edit.applyRefactor({
+    refactorName: "Extract Symbol",
+    actionName: "constant_scope_0",
+    actionDescription: "Extract to constant in enclosing scope",
+    newContent:
+`function fWithRest(fn: (...a: number[]) => number) { }
+const newLocal = (a: number, b: number, c: number): number => a + b + c;
+fWithRest(/*RENAME*/newLocal);`
+});
+
diff --git a/tests/cases/fourslash/extract-const-callback-function-this1.ts b/tests/cases/fourslash/extract-const-callback-function-this1.ts
new file mode 100644
index 00000000000..b0d269400bb
--- /dev/null
+++ b/tests/cases/fourslash/extract-const-callback-function-this1.ts
@@ -0,0 +1,15 @@
+/// <reference path='fourslash.ts' />
+
+////declare function fWithThis(fn: (this: { a: string }, a: string) => string): void;
+////fWithThis(/*a*/function (a: string): string { return this.a; }/*b*/);
+
+goTo.select("a", "b");
+edit.applyRefactor({
+    refactorName: "Extract Symbol",
+    actionName: "constant_scope_0",
+    actionDescription: "Extract to constant in enclosing scope",
+    newContent:
+`declare function fWithThis(fn: (this: { a: string }, a: string) => string): void;
+const newLocal = function(this: { a: string; }, a: string): string { return this.a; };
+fWithThis(/*RENAME*/newLocal);`
+});
diff --git a/tests/cases/fourslash/extract-const-callback-function-this2.ts b/tests/cases/fourslash/extract-const-callback-function-this2.ts
new file mode 100644
index 00000000000..518c39e26e5
--- /dev/null
+++ b/tests/cases/fourslash/extract-const-callback-function-this2.ts
@@ -0,0 +1,15 @@
+/// <reference path='fourslash.ts' />
+
+////declare function fWithThis(fn: (this: { a: string }, a: string) => string): void;
+////fWithThis(/*a*/function (a) { return this.a; }/*b*/);
+
+goTo.select("a", "b");
+edit.applyRefactor({
+    refactorName: "Extract Symbol",
+    actionName: "constant_scope_0",
+    actionDescription: "Extract to constant in enclosing scope",
+    newContent:
+`declare function fWithThis(fn: (this: { a: string }, a: string) => string): void;
+const newLocal = function(this: { a: string; }, a: string): string { return this.a; };
+fWithThis(/*RENAME*/newLocal);`
+});
diff --git a/tests/cases/fourslash/extract-const-callback-function-this3.ts b/tests/cases/fourslash/extract-const-callback-function-this3.ts
new file mode 100644
index 00000000000..1d9d8ba59e7
--- /dev/null
+++ b/tests/cases/fourslash/extract-const-callback-function-this3.ts
@@ -0,0 +1,17 @@
+/// <reference path='fourslash.ts' />
+
+////declare function fWithThis(fn: (this: { a: string }, a: string) => string): void;
+////fWithThis(/*a*/function (this: { a: string }, a) { return this.a; }/*b*/);
+
+goTo.select("a", "b");
+edit.applyRefactor({
+    refactorName: "Extract Symbol",
+    actionName: "constant_scope_0",
+    actionDescription: "Extract to constant in enclosing scope",
+    newContent:
+`declare function fWithThis(fn: (this: { a: string }, a: string) => string): void;
+const newLocal = function(this: {
+    a: string;
+}, a: string): string { return this.a; };
+fWithThis(/*RENAME*/newLocal);`
+});
diff --git a/tests/cases/fourslash/extract-const-callback-function.ts b/tests/cases/fourslash/extract-const-callback-function.ts
new file mode 100644
index 00000000000..ccf05c6c1ad
--- /dev/null
+++ b/tests/cases/fourslash/extract-const-callback-function.ts
@@ -0,0 +1,13 @@
+/// <reference path='fourslash.ts' />
+
+////const x = [1,2,3].map(/*a*/function (x) { return x + 1 }/*b*/);
+
+goTo.select("a", "b");
+edit.applyRefactor({
+    refactorName: "Extract Symbol",
+    actionName: "constant_scope_0",
+    actionDescription: "Extract to constant in enclosing scope",
+    newContent:
+`const newLocal = function(x: number): number { return x + 1; };
+const x = [1,2,3].map(/*RENAME*/newLocal);`
+});
diff --git a/tests/cases/fourslash/extract-const-callback.ts b/tests/cases/fourslash/extract-const-callback.ts
new file mode 100644
index 00000000000..4bd71ba16b1
--- /dev/null
+++ b/tests/cases/fourslash/extract-const-callback.ts
@@ -0,0 +1,13 @@
+/// <reference path='fourslash.ts' />
+
+////const x = [1,2,3].map(/*a*/x => x + 1/*b*/);
+
+goTo.select("a", "b");
+edit.applyRefactor({
+    refactorName: "Extract Symbol",
+    actionName: "constant_scope_0",
+    actionDescription: "Extract to constant in enclosing scope",
+    newContent:
+`const newLocal = (x: number): number => x + 1;
+const x = [1,2,3].map(/*RENAME*/newLocal);`
+});