In Eclipse I used to use a combination (first press Shift + Alt + A, then press S) to extract strings into strings.xml
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Doing the same thing.
Paramasivam Vijay Anand Had it right.
Android Studio 2.2.3 you can go to help and turn on the Extract string resource. However, Alt+enter does not extract the resource when clicking the text in the Design tab, it works for me when I clicked to the Activity_main and then selected the text there. Quotes didn't seem to matter.