diff --git a/README.md b/README.md
index f16e612b..bee77765 100644
--- a/README.md
+++ b/README.md
@@ -150,6 +150,18 @@ See more options and usage details with:
 gitingest --help
 ```
 
+### Extracting files from a digest
+
+You can also reconstruct the source files from a digest using the `extract` command:
+
+```bash
+# Extract files from digest.txt to the current directory
+gitingest extract digest.txt
+
+# Extract files to a specific output directory
+gitingest extract digest.txt --output ./restored-project
+```
+
 ## 🐍 Python package usage
 
 ```python
diff --git a/src/gitingest/__init__.py b/src/gitingest/__init__.py
index 75f3ea41..8e603934 100644
--- a/src/gitingest/__init__.py
+++ b/src/gitingest/__init__.py
@@ -1,5 +1,6 @@
 """Gitingest: A package for ingesting data from Git repositories."""
 
 from gitingest.entrypoint import ingest, ingest_async
+from gitingest.extract import extract
 
-__all__ = ["ingest", "ingest_async"]
+__all__ = ["ingest", "ingest_async", "extract"]
diff --git a/src/gitingest/__main__.py b/src/gitingest/__main__.py
index ea01dae2..2f619633 100644
--- a/src/gitingest/__main__.py
+++ b/src/gitingest/__main__.py
@@ -11,6 +11,7 @@
 
 from gitingest.config import MAX_FILE_SIZE, OUTPUT_FILE_NAME
 from gitingest.entrypoint import ingest_async
+from gitingest.extract import extract
 
 # Import logging configuration first to intercept all logging
 from gitingest.utils.logging_config import get_logger
@@ -31,7 +32,34 @@ class _CLIArgs(TypedDict):
     output: str | None
 
 
-@click.command()
+class DefaultGroup(click.Group):
+    """A Click Group that invokes a default command if a subcommand is not found."""
+
+    def parse_args(self, ctx, args):
+        if args and args[0] in ["--help", "-h"]:
+            return super().parse_args(ctx, args)
+
+        if not args or args[0] not in self.commands:
+            # Default to ingest command
+            # Insert "ingest" as the first argument
+            args = ["ingest"] + args
+        
+        return super().parse_args(ctx, args)
+
+
+@click.group(cls=DefaultGroup)
+def main() -> None:
+    """Gitingest CLI tool.
+
+    The default command is 'ingest', which analyzes a directory or repository.
+    Use 'gitingest ingest --help' to see options for the default command.
+    
+    To extract files from a digest, use 'gitingest extract'.
+    """
+    pass
+
+
+@main.command(name="ingest")
 @click.argument("source", type=str, default=".")
 @click.option(
     "--max-size",
@@ -76,7 +104,7 @@ class _CLIArgs(TypedDict):
     default=None,
     help="Output file path (default: digest.txt in current directory). Use '-' for stdout.",
 )
-def main(**cli_kwargs: Unpack[_CLIArgs]) -> None:
+def ingest_command(**cli_kwargs: Unpack[_CLIArgs]) -> None:
     """Run the CLI entry point to analyze a repo / directory and dump its contents.
 
     Parameters
@@ -114,6 +142,42 @@ def main(**cli_kwargs: Unpack[_CLIArgs]) -> None:
     asyncio.run(_async_main(**cli_kwargs))
 
 
+@main.command(name="extract")
+@click.argument("digest_file", type=click.Path(exists=True, dir_okay=False))
+@click.option(
+    "--output",
+    "-o",
+    default=".",
+    type=click.Path(file_okay=False, dir_okay=True),
+    help="Output directory where files will be extracted.",
+)
+def extract_command(digest_file: str, output: str) -> None:
+    """Extract files from a gitingest digest file.
+
+    Parameters
+    ----------
+    digest_file : str
+        Path to the digest file.
+    output : str
+        Directory where extracted files will be saved.
+
+    Examples
+    --------
+    Extract files from digest.txt to the current directory:
+        $ gitingest extract digest.txt
+
+    Extract files to a specific output directory:
+        $ gitingest extract digest.txt --output ./restored-project
+
+    """
+    try:
+        extract(digest_file, output)
+        click.echo(f"Successfully extracted files to '{output}'")
+    except Exception as exc:
+        click.echo(f"Error extracting files: {exc}", err=True)
+        raise click.Abort from exc
+
+
 async def _async_main(
     source: str,
     *,
diff --git a/src/gitingest/extract.py b/src/gitingest/extract.py
new file mode 100644
index 00000000..de92bcfd
--- /dev/null
+++ b/src/gitingest/extract.py
@@ -0,0 +1,114 @@
+"""Module for extracting files from a gitingest digest."""
+
+from __future__ import annotations
+
+import os
+import re
+from pathlib import Path
+
+from gitingest.schemas.filesystem import EMPTY_FILE, SEPARATOR
+from gitingest.utils.logging_config import get_logger
+
+logger = get_logger(__name__)
+
+
+def extract(digest_path: str | Path, output_dir: str | Path = ".") -> None:
+    """Extract files from a gitingest digest file.
+
+    Parameters
+    ----------
+    digest_path : str | Path
+        Path to the digest file.
+    output_dir : str | Path
+        Directory where extracted files will be saved.
+
+    """
+    digest_path = Path(digest_path)
+    output_dir = Path(output_dir)
+
+    if not digest_path.exists():
+        raise FileNotFoundError(f"Digest file not found: {digest_path}")
+
+    logger.info("Reading digest file", extra={"digest_path": str(digest_path)})
+    with digest_path.open("r", encoding="utf-8") as f:
+        content = f.read()
+
+    # Create the output directory if it doesn't exist
+    output_dir.mkdir(parents=True, exist_ok=True)
+
+    # Regex to identify file blocks
+    # Format:
+    # ================================================
+    # FILE: path/to/file
+    # ================================================
+    # content...
+    separator_pattern = re.escape(SEPARATOR)
+    pattern = re.compile(
+        rf"^{separator_pattern}\n(FILE|SYMLINK): (.+)\n{separator_pattern}\n",
+        re.MULTILINE,
+    )
+
+    matches = list(pattern.finditer(content))
+
+    if not matches:
+        logger.warning("No files found in the digest.")
+        return
+
+    logger.info(f"Found {len(matches)} files to extract.")
+
+    for i, match in enumerate(matches):
+        node_type = match.group(1)
+        path_info = match.group(2).strip()
+
+        # Calculate content range
+        start_idx = match.end()
+        end_idx = matches[i + 1].start() if i + 1 < len(matches) else len(content)
+
+        # Extract content and remove trailing newlines added during ingestion
+        file_content = content[start_idx:end_idx]
+        # The ingestion process adds "\n\n" to content_string and joins with "\n", so we expect 3 newlines.
+        if file_content.endswith("\n\n\n"):
+            file_content = file_content[:-3]
+
+        if node_type == "SYMLINK":
+            # SYMLINK: source -> target
+            if " -> " in path_info:
+                link_path_str, target_path_str = path_info.split(" -> ", 1)
+                link_full_path = output_dir / link_path_str
+
+                # Ensure parent dir exists
+                link_full_path.parent.mkdir(parents=True, exist_ok=True)
+
+                # Create symlink
+                # We need to be careful with existing files
+                if link_full_path.exists() or link_full_path.is_symlink():
+                    link_full_path.unlink()
+
+                try:
+                    os.symlink(target_path_str, link_full_path)
+                    logger.debug(
+                        f"Created symlink: {link_full_path} -> {target_path_str}"
+                    )
+                except OSError as e:
+                    logger.error(f"Failed to create symlink {link_full_path}: {e}")
+            else:
+                logger.warning(f"Invalid symlink format: {path_info}")
+
+        else:
+            # FILE: path
+            # path_info is the file path
+            target_file_path = output_dir / path_info
+
+            # Ensure parent dir exists
+            target_file_path.parent.mkdir(parents=True, exist_ok=True)
+
+            try:
+                if file_content == EMPTY_FILE:
+                    file_content = ""
+                with target_file_path.open("w", encoding="utf-8") as f:
+                    f.write(file_content)
+                logger.debug(f"Extracted: {target_file_path}")
+            except OSError as e:
+                logger.error(f"Failed to write file {target_file_path}: {e}")
+
+    logger.info("Extraction complete.")
diff --git a/src/gitingest/schemas/filesystem.py b/src/gitingest/schemas/filesystem.py
index cc66e7b1..70713114 100644
--- a/src/gitingest/schemas/filesystem.py
+++ b/src/gitingest/schemas/filesystem.py
@@ -15,7 +15,7 @@
     from pathlib import Path
 
 SEPARATOR = "=" * 48  # Tiktoken, the tokenizer openai uses, counts 2 tokens if we have more than 48
-
+EMPTY_FILE = "[Empty file]"
 
 class FileSystemNodeType(Enum):
     """Enum representing the type of a file system node (directory or file)."""
@@ -140,7 +140,7 @@ def content(self) -> str:  # pylint: disable=too-many-return-statements
             return "Error reading file"
 
         if chunk == b"":
-            return "[Empty file]"
+            return EMPTY_FILE
 
         if not _decodes(chunk, "utf-8"):
             return "[Binary file]"
diff --git a/tests/test_cli.py b/tests/test_cli.py
index bc08eb15..80621bde 100644
--- a/tests/test_cli.py
+++ b/tests/test_cli.py
@@ -90,6 +90,34 @@ def test_cli_with_stdout_output() -> None:
             output_file.unlink()
 
 
+def test_cli_extract_file(tmp_path: Path, monkeypatch: pytest.MonkeyPatch) -> None:
+    """Test the extract command."""
+    monkeypatch.chdir(tmp_path)
+
+    # Create a dummy digest file
+    digest_content = (
+        "Directory structure:\n"
+        "└── test_file.py\n\n"
+        "================================================\n"
+        "FILE: test_file.py\n"
+        "================================================\n"
+        "print('hello world')\n\n\n"
+    )
+    digest_file = tmp_path / "digest.txt"
+    digest_file.write_text(digest_content, encoding="utf-8")
+
+    # Run extract
+    result = _invoke_isolated_cli_runner(["extract", str(digest_file), "-o", "."])
+
+    assert result.exit_code == 0, result.stderr
+    assert "Successfully extracted files" in result.stdout
+
+    # Check if file was extracted
+    extracted_file = tmp_path / "test_file.py"
+    assert extracted_file.exists()
+    assert extracted_file.read_text(encoding="utf-8") == "print('hello world')"
+
+
 def _invoke_isolated_cli_runner(args: list[str]) -> Result:
     """Return a ``CliRunner`` that keeps ``stderr`` separate on Click 8.0-8.1."""
     kwargs = {}
diff --git a/tests/test_extract.py b/tests/test_extract.py
new file mode 100644
index 00000000..b0de15f0
--- /dev/null
+++ b/tests/test_extract.py
@@ -0,0 +1,137 @@
+"""Unit tests for the gitingest.extract module."""
+
+from __future__ import annotations
+
+import os
+import pytest
+from pathlib import Path
+
+from gitingest.extract import extract
+from gitingest.schemas.filesystem import SEPARATOR
+
+
+def test_extract_basic_file(tmp_path: Path) -> None:
+    """Test basic extraction of a single text file."""
+    digest_content = (
+        "Directory structure:\n"
+        "└── file1.txt\n\n"
+        f"{SEPARATOR}\n"
+        "FILE: file1.txt\n"
+        f"{SEPARATOR}\n"
+        "Hello, World!\n\n\n"
+    )
+    digest_file = tmp_path / "test_digest.txt"
+    digest_file.write_text(digest_content, encoding="utf-8")
+
+    output_dir = tmp_path / "extracted_output"
+    extract(digest_file, output_dir)
+
+    extracted_file = output_dir / "file1.txt"
+    assert extracted_file.exists()
+    assert extracted_file.read_text(encoding="utf-8") == "Hello, World!"
+
+
+def test_extract_to_specified_directory(tmp_path: Path) -> None:
+    """Test extraction to a custom output directory."""
+    digest_content = (
+        "Directory structure:\n"
+        "└── sub/file.txt\n\n"
+        f"{SEPARATOR}\n"
+        "FILE: sub/file.txt\n"
+        f"{SEPARATOR}\n"
+        "Content in subfolder.\n\n\n"
+    )
+    digest_file = tmp_path / "custom_digest.txt"
+    digest_file.write_text(digest_content, encoding="utf-8")
+
+    output_dir = tmp_path / "my_custom_output"
+    extract(digest_file, output_dir)
+
+    extracted_file = output_dir / "sub" / "file.txt"
+    assert extracted_file.exists()
+    assert extracted_file.read_text(encoding="utf-8") == "Content in subfolder."
+
+
+def test_extract_empty_file(tmp_path: Path) -> None:
+    """Test extraction of an empty file placeholder."""
+    digest_content = (
+        "Directory structure:\n"
+        "└── empty.txt\n\n"
+        f"{SEPARATOR}\n"
+        "FILE: empty.txt\n"
+        f"{SEPARATOR}\n"
+        "[Empty file]\n\n\n"
+    )
+    digest_file = tmp_path / "empty_digest.txt"
+    digest_file.write_text(digest_content, encoding="utf-8")
+
+    output_dir = tmp_path / "output_empty"
+    extract(digest_file, output_dir)
+
+    extracted_file = output_dir / "empty.txt"
+    assert extracted_file.exists()
+    assert extracted_file.read_text(encoding="utf-8") == ""
+
+
+def test_extract_binary_file_placeholder(tmp_path: Path) -> None:
+    """Test extraction of a binary file placeholder."""
+    digest_content = (
+        "Directory structure:\n"
+        "└── image.png\n\n"
+        f"{SEPARATOR}\n"
+        "FILE: image.png\n"
+        f"{SEPARATOR}\n"
+        "[Binary file]\n\n\n"
+    )
+    digest_file = tmp_path / "binary_digest.txt"
+    digest_file.write_text(digest_content, encoding="utf-8")
+
+    output_dir = tmp_path / "output_binary"
+    extract(digest_file, output_dir)
+
+    extracted_file = output_dir / "image.png"
+    assert extracted_file.exists()
+    assert extracted_file.read_text(encoding="utf-8") == "[Binary file]"
+
+
+def test_extract_symlink(tmp_path: Path) -> None:
+    """Test extraction of a symlink."""
+    # Create a target file first
+    target_file = tmp_path / "target.txt"
+    target_file.write_text("This is the target.", encoding="utf-8")
+
+    digest_content = (
+        "Directory structure:\n"
+        "├── target.txt\n"
+        "└── link.txt -> target.txt\n\n"
+        f"{SEPARATOR}\n"
+        "FILE: target.txt\n"
+        f"{SEPARATOR}\n"
+        "This is the target.\n\n\n"
+        f"{SEPARATOR}\n"
+        "SYMLINK: link.txt -> target.txt\n"
+        f"{SEPARATOR}\n"
+        "\n\n"  # Symlinks have empty content in the digest
+    )
+    digest_file = tmp_path / "symlink_digest.txt"
+    digest_file.write_text(digest_content, encoding="utf-8")
+
+    output_dir = tmp_path / "output_symlink"
+    extract(digest_file, output_dir)
+
+    extracted_symlink = output_dir / "link.txt"
+    extracted_target = output_dir / "target.txt"
+
+    assert extracted_target.exists()
+    assert extracted_target.read_text() == "This is the target."
+    assert extracted_symlink.is_symlink()
+    assert os.readlink(extracted_symlink) == str(Path("target.txt"))  # Symlink target is relative
+
+
+def test_extract_file_not_found(tmp_path: Path) -> None:
+    """Test that FileNotFoundError is raised for a missing digest file."""
+    non_existent_digest = tmp_path / "non_existent.txt"
+    output_dir = tmp_path / "output_error"
+
+    with pytest.raises(FileNotFoundError, match="Digest file not found"):
+        extract(non_existent_digest, output_dir)