diff --git a/src/main/kotlin/org/move/ide/inspections/compilerV2/MvReplaceWithCompoundAssignmentInspection.kt b/src/main/kotlin/org/move/ide/inspections/compilerV2/MvReplaceWithCompoundAssignmentInspection.kt
new file mode 100644
index 00000000..eedd0aa9
--- /dev/null
+++ b/src/main/kotlin/org/move/ide/inspections/compilerV2/MvReplaceWithCompoundAssignmentInspection.kt
@@ -0,0 +1,56 @@
+package org.move.ide.inspections.compilerV2
+
+import com.intellij.codeInsight.PsiEquivalenceUtil
+import com.intellij.codeInspection.ProblemHighlightType.WEAK_WARNING
+import com.intellij.codeInspection.ProblemsHolder
+import com.intellij.openapi.project.Project
+import com.intellij.psi.PsiFile
+import org.move.ide.inspections.DiagnosticFix
+import org.move.lang.core.MOVE_ARITHMETIC_BINARY_OPS
+import org.move.lang.core.psi.MvAssignmentExpr
+import org.move.lang.core.psi.MvBinaryExpr
+import org.move.lang.core.psi.ext.elementType
+import org.move.lang.core.psi.ext.operator
+import org.move.lang.core.psi.psiFactory
+
+class MvReplaceWithCompoundAssignmentInspection:
+    Move2OnlyInspectionBase<MvAssignmentExpr>(MvAssignmentExpr::class.java) {
+
+    override fun visitTargetElement(element: MvAssignmentExpr, holder: ProblemsHolder, isOnTheFly: Boolean) {
+        val lhsExpr = element.expr
+        val initializerExpr = element.initializer.expr ?: return
+        if (initializerExpr is MvBinaryExpr
+            && initializerExpr.operator.elementType in MOVE_ARITHMETIC_BINARY_OPS
+        ) {
+            // take lhs of binary plus expr
+            val argumentExpr = initializerExpr.left
+            if (PsiEquivalenceUtil.areElementsEquivalent(lhsExpr, argumentExpr)) {
+                val op = initializerExpr.operator.text
+                holder.registerProblem(
+                    element,
+                    "Can be replaced with compound assignment",
+                    WEAK_WARNING,
+                    ReplaceWithCompoundAssignmentFix(element, op)
+                )
+            }
+        }
+    }
+
+    class ReplaceWithCompoundAssignmentFix(assignmentExpr: MvAssignmentExpr, val op: String):
+        DiagnosticFix<MvAssignmentExpr>(assignmentExpr) {
+
+        override fun getText(): String = "Replace with compound assignment expr"
+
+        override fun invoke(project: Project, file: PsiFile, element: MvAssignmentExpr) {
+            val lhsExpr = element.expr
+            val rhsExpr = (element.initializer.expr as? MvBinaryExpr)?.right ?: return
+
+            val psiFactory = project.psiFactory
+            val assignBinExpr = psiFactory.expr<MvBinaryExpr>("x $op= 1")
+            assignBinExpr.left.replace(lhsExpr)
+            assignBinExpr.right?.replace(rhsExpr)
+
+            element.replace(assignBinExpr)
+        }
+    }
+}
\ No newline at end of file
diff --git a/src/main/kotlin/org/move/lang/core/MvTokenType.kt b/src/main/kotlin/org/move/lang/core/MvTokenType.kt
index 6a9bc58a..5295ac51 100644
--- a/src/main/kotlin/org/move/lang/core/MvTokenType.kt
+++ b/src/main/kotlin/org/move/lang/core/MvTokenType.kt
@@ -28,6 +28,11 @@ val TYPES = tokenSetOf(PATH_TYPE, REF_TYPE, TUPLE_TYPE)
 
 val MOVE_COMMENTS = tokenSetOf(BLOCK_COMMENT, EOL_COMMENT, EOL_DOC_COMMENT)
 
+val MOVE_ARITHMETIC_BINARY_OPS = tokenSetOf(
+    PLUS, MINUS, MUL, DIV, MODULO,
+    AND, OR, XOR,
+    LT_LT, GT_GT,
+)
 val MOVE_BINARY_OPS = tokenSetOf(
     OR_OR, AND_AND,
     EQ_EQ_GT, LT_EQ_EQ_GT,
diff --git a/src/main/kotlin/org/move/lang/core/psi/ext/MvBinaryExpr.kt b/src/main/kotlin/org/move/lang/core/psi/ext/MvBinaryExpr.kt
index d5883e06..cd7c718d 100644
--- a/src/main/kotlin/org/move/lang/core/psi/ext/MvBinaryExpr.kt
+++ b/src/main/kotlin/org/move/lang/core/psi/ext/MvBinaryExpr.kt
@@ -1,10 +1,13 @@
 package org.move.lang.core.psi.ext
 
 import com.intellij.lang.ASTNode
+import com.intellij.psi.PsiElement
 import org.move.lang.MvElementTypes.BINARY_OP
 import org.move.lang.core.psi.MvBinaryExpr
 import org.move.lang.core.psi.MvElementImpl
 
+val MvBinaryExpr.operator: PsiElement get() = binaryOp.operator
+
 abstract class MvBinaryExprMixin(node: ASTNode): MvElementImpl(node),
                                                  MvBinaryExpr {
     override fun toString(): String {
diff --git a/src/main/resources/META-INF/plugin.xml b/src/main/resources/META-INF/plugin.xml
index 0165711a..1e985a27 100644
--- a/src/main/resources/META-INF/plugin.xml
+++ b/src/main/resources/META-INF/plugin.xml
@@ -295,6 +295,10 @@
                      displayName="Convert to index expr"
                      enabledByDefault="true" level="WEAK WARNING"
                      implementationClass="org.move.ide.inspections.compilerV2.MvReplaceWithIndexExprInspection" />
+    <localInspection language="Move" groupName="Move"
+                     displayName="Convert to compound expr"
+                     enabledByDefault="true" level="WEAK WARNING"
+                     implementationClass="org.move.ide.inspections.compilerV2.MvReplaceWithCompoundAssignmentInspection" />
 
     <!--  cannot be run on-the-fly, therefore enabled  -->
     <globalInspection language="Move" groupName="Move"
diff --git a/src/main/resources/inspectionDescriptions/MvReplaceWithCompoundAssignment.html b/src/main/resources/inspectionDescriptions/MvReplaceWithCompoundAssignment.html
new file mode 100644
index 00000000..ab055201
--- /dev/null
+++ b/src/main/resources/inspectionDescriptions/MvReplaceWithCompoundAssignment.html
@@ -0,0 +1,5 @@
+<html>
+<body>
+Replaces `x = x + 1` with `x += 1`
+</body>
+</html>
\ No newline at end of file
diff --git a/src/test/kotlin/org/move/ide/inspections/compilerV2/MvReplaceWithCompoundAssignmentInspectionTest.kt b/src/test/kotlin/org/move/ide/inspections/compilerV2/MvReplaceWithCompoundAssignmentInspectionTest.kt
new file mode 100644
index 00000000..87f3f835
--- /dev/null
+++ b/src/test/kotlin/org/move/ide/inspections/compilerV2/MvReplaceWithCompoundAssignmentInspectionTest.kt
@@ -0,0 +1,72 @@
+package org.move.ide.inspections.compilerV2
+
+import org.intellij.lang.annotations.Language
+import org.move.utils.tests.MoveV2
+import org.move.utils.tests.annotation.InspectionTestBase
+
+@MoveV2
+class MvReplaceWithCompoundAssignmentInspectionTest:
+    InspectionTestBase(MvReplaceWithCompoundAssignmentInspection::class) {
+
+    fun `test replace variable assignment with plus`() = doFixTest(
+        """
+        module 0x1::m {
+            fun main() {
+                let x = 1;
+                <weak_warning descr="Can be replaced with compound assignment">/*caret*/x = x + 1</weak_warning>;
+            }
+        }
+        """, """
+        module 0x1::m {
+            fun main() {
+                let x = 1;
+                x += 1;
+            }
+        }
+        """
+    )
+
+    fun `test replace variable assignment with left shift`() = doFixTest(
+        """
+        module 0x1::m {
+            fun main() {
+                let x = 1;
+                <weak_warning descr="Can be replaced with compound assignment">/*caret*/x = x << 1</weak_warning>;
+            }
+        }
+        """, """
+        module 0x1::m {
+            fun main() {
+                let x = 1;
+                x <<= 1;
+            }
+        }
+        """
+    )
+
+    fun `test replace deref assignment with plus`() = doFixTest(
+        """
+        module 0x1::m {
+            fun main(p: &u8) {
+                <weak_warning descr="Can be replaced with compound assignment">/*caret*/*p = *p + 1</weak_warning>;
+            }
+        }
+        """, """
+        module 0x1::m {
+            fun main(p: &u8) {
+                *p += 1;
+            }
+        }
+        """
+    )
+
+    private fun doTest(@Language("Move") text: String) =
+        checkByText(text, checkWarn = false, checkWeakWarn = true)
+
+    private fun doFixTest(
+        @Language("Move") before: String,
+        @Language("Move") after: String,
+    ) =
+        checkFixByText("Replace with compound assignment expr", before, after,
+                       checkWarn = false, checkWeakWarn = true)
+}
\ No newline at end of file