diff --git a/CODEOWNERS b/CODEOWNERS
index c630db7948..73f731b008 100644
--- a/CODEOWNERS
+++ b/CODEOWNERS
@@ -124,6 +124,7 @@ esphome/components/esp8266/* @esphome/core
 esphome/components/ethernet_info/* @gtjadsonsantos
 esphome/components/event/* @nohat
 esphome/components/exposure_notifications/* @OttoWinter
+esphome/components/extensions/* @kpfleming
 esphome/components/ezo/* @ssieb
 esphome/components/ezo_pmp/* @carlos-sarmiento
 esphome/components/factory_reset/* @anatoly-savchenkov
diff --git a/esphome/components/extensions/__init__.py b/esphome/components/extensions/__init__.py
new file mode 100644
index 0000000000..334b5f1647
--- /dev/null
+++ b/esphome/components/extensions/__init__.py
@@ -0,0 +1,85 @@
+from typing import Any, Union
+import esphome.config_validation as cv
+from esphome.config_helpers import merge_config
+from esphome.const import (
+    CONF_EXTENSIONS,
+    CONF_ID,
+)
+
+CODEOWNERS = ["@kpfleming"]
+
+DOMAIN = CONF_EXTENSIONS
+
+CONFIG_SCHEMA = cv.Schema(
+    {
+        cv.validate_id_name: dict,
+    }
+)
+
+
+class ObjectInDict:
+    def __init__(self, dic: dict, key: str):
+        self.dic = dic
+        self.key = key
+
+
+class ObjectInList:
+    def __init__(self, lis: list, index: int):
+        self.lis = lis
+        self.index = index
+
+
+def gather_object_ids(config: dict) -> dict[str, Union[ObjectInDict, ObjectInList]]:
+    result = {}
+    for k, v in config.items():
+        if k == CONF_EXTENSIONS:
+            continue
+        if isinstance(v, dict):
+            if CONF_ID in v and isinstance(v[CONF_ID], str):
+                result[v[CONF_ID]] = ObjectInDict(config, k)
+            result.update(gather_object_ids(v))
+        elif isinstance(v, list):
+            for i, o in enumerate(v):
+                if isinstance(o, dict):
+                    if CONF_ID in o and isinstance(o[CONF_ID], str):
+                        result[o[CONF_ID]] = ObjectInList(v, i)
+                    result.update(gather_object_ids(o))
+    return result
+
+
+def do_extensions_pass(config: dict) -> dict[str, Any]:
+    if CONF_EXTENSIONS not in config:
+        return config
+    extensions = config[CONF_EXTENSIONS]
+    with cv.prepend_path(CONF_EXTENSIONS):
+        extensions = CONFIG_SCHEMA(extensions)
+
+        while extensions:
+            matched = False
+            ids = gather_object_ids(config)
+
+            for id in [id for id in extensions.keys() if id in ids]:
+                matched = True
+                obj = ids[id]
+                if isinstance(obj, ObjectInDict):
+                    obj.dic[obj.key] = merge_config(obj.dic[obj.key], extensions[id])
+                elif isinstance(obj, ObjectInList):
+                    obj.lis[obj.index] = merge_config(
+                        obj.lis[obj.index], extensions[id]
+                    )
+                del extensions[id]
+
+            if not matched:
+                break
+
+        # if any extension IDs were not found, report them
+        if extensions:
+            raise cv.MultipleInvalid(
+                [
+                    cv.Invalid(f"No match for extension ID {k} found in configuration.")
+                    for k in extensions.keys()
+                ]
+            )
+
+        del config[CONF_EXTENSIONS]
+    return config
diff --git a/esphome/config.py b/esphome/config.py
index 36a81f677b..621c34fabc 100644
--- a/esphome/config.py
+++ b/esphome/config.py
@@ -16,6 +16,7 @@ from esphome import core, yaml_util, loader, pins
 import esphome.core.config as core_config
 from esphome.const import (
     CONF_ESPHOME,
+    CONF_EXTENSIONS,
     CONF_ID,
     CONF_PLATFORM,
     CONF_PACKAGES,
@@ -801,6 +802,8 @@ def validate_config(
     except vol.Invalid as err:
         result.add_error(err)
 
+    CORE.raw_config = config
+
     # 1.2. Load external_components
     if CONF_EXTERNAL_COMPONENTS in config:
         from esphome.components.external_components import do_external_components_pass
@@ -813,6 +816,20 @@ def validate_config(
             result.add_error(err)
             return result
 
+    # 2. Process object extensions
+    if CONF_EXTENSIONS in config:
+        from esphome.components.extensions import do_extensions_pass
+
+        result.add_output_path([CONF_EXTENSIONS], CONF_EXTENSIONS)
+        try:
+            config = do_extensions_pass(config)
+        except vol.Invalid as err:
+            result.update(config)
+            result.add_error(err)
+            return result
+
+    CORE.raw_config = config
+
     if "esphomeyaml" in config:
         _LOGGER.warning(
             "The esphomeyaml section has been renamed to esphome in 1.11.0. "
diff --git a/esphome/const.py b/esphome/const.py
index 324b32e847..25e436a1ab 100644
--- a/esphome/const.py
+++ b/esphome/const.py
@@ -257,6 +257,7 @@ CONF_EVENT_TYPES = "event_types"
 CONF_EXPIRE_AFTER = "expire_after"
 CONF_EXPORT_ACTIVE_ENERGY = "export_active_energy"
 CONF_EXPORT_REACTIVE_ENERGY = "export_reactive_energy"
+CONF_EXTENSIONS = "extensions"
 CONF_EXTERNAL_CLOCK_INPUT = "external_clock_input"
 CONF_EXTERNAL_COMPONENTS = "external_components"
 CONF_EXTERNAL_TEMPERATURE = "external_temperature"
diff --git a/tests/component_tests/extensions/test_extensions.py b/tests/component_tests/extensions/test_extensions.py
new file mode 100644
index 0000000000..65480cad6b
--- /dev/null
+++ b/tests/component_tests/extensions/test_extensions.py
@@ -0,0 +1,174 @@
+"""Tests for the extensions component."""
+
+import pytest
+
+import esphome.config_validation as cv
+
+from esphome.const import (
+    CONF_EXTENSIONS,
+    CONF_ID,
+    CONF_NAME,
+    CONF_SENSOR,
+)
+from esphome.components.extensions import do_extensions_pass
+
+# Test strings
+TEST_OBJECT_NAME_1 = "test_object_name_1"
+TEST_SENSOR_NAME_1 = "test_sensor_name_1"
+TEST_SENSOR_NAME_2 = "test_sensor_name_2"
+TEST_SENSOR_ID_1 = "test_sensor_id_1"
+TEST_SENSOR_ID_2 = "test_sensor_id_2"
+
+
+def test_basic():
+    """
+    Ensure that the name provided by the extension is added to the object.
+    """
+    config = {
+        CONF_SENSOR: [
+            {
+                CONF_ID: TEST_SENSOR_ID_1,
+            }
+        ],
+        CONF_EXTENSIONS: {
+            TEST_SENSOR_ID_1: {
+                CONF_NAME: TEST_SENSOR_NAME_1,
+            }
+        },
+    }
+
+    expected = {
+        CONF_SENSOR: [
+            {
+                CONF_ID: TEST_SENSOR_ID_1,
+                CONF_NAME: TEST_SENSOR_NAME_1,
+            }
+        ],
+    }
+
+    actual = do_extensions_pass(config)
+    assert actual == expected
+
+
+def test_basic_override():
+    """
+    Ensure that the name provided by the extension overrides the one in the object.
+    """
+    config = {
+        CONF_SENSOR: [
+            {
+                CONF_ID: TEST_SENSOR_ID_1,
+                CONF_NAME: TEST_SENSOR_NAME_1,
+            }
+        ],
+        CONF_EXTENSIONS: {
+            TEST_SENSOR_ID_1: {
+                CONF_NAME: TEST_SENSOR_NAME_2,
+            }
+        },
+    }
+
+    expected = {
+        CONF_SENSOR: [
+            {
+                CONF_ID: TEST_SENSOR_ID_1,
+                CONF_NAME: TEST_SENSOR_NAME_2,
+            }
+        ],
+    }
+
+    actual = do_extensions_pass(config)
+    assert actual == expected
+
+
+def test_embedded():
+    """
+    Ensure that the name provided by the extension is added to the embedded object.
+    """
+    config = {
+        CONF_SENSOR: [
+            {
+                TEST_OBJECT_NAME_1: {
+                    CONF_ID: TEST_SENSOR_ID_1,
+                },
+            }
+        ],
+        CONF_EXTENSIONS: {
+            TEST_SENSOR_ID_1: {
+                CONF_NAME: TEST_SENSOR_NAME_1,
+            }
+        },
+    }
+
+    expected = {
+        CONF_SENSOR: [
+            {
+                TEST_OBJECT_NAME_1: {
+                    CONF_ID: TEST_SENSOR_ID_1,
+                    CONF_NAME: TEST_SENSOR_NAME_1,
+                },
+            }
+        ],
+    }
+
+    actual = do_extensions_pass(config)
+    assert actual == expected
+
+
+def test_two_pass_embedded():
+    """
+    Ensure that the name provided by an extension is added to the object added by a previous extension.
+    """
+    config = {
+        CONF_SENSOR: [
+            {
+                CONF_ID: TEST_SENSOR_ID_1,
+            }
+        ],
+        CONF_EXTENSIONS: {
+            TEST_SENSOR_ID_1: {
+                TEST_OBJECT_NAME_1: {
+                    CONF_ID: TEST_SENSOR_ID_2,
+                },
+            },
+            TEST_SENSOR_ID_2: {
+                CONF_NAME: TEST_SENSOR_NAME_2,
+            },
+        },
+    }
+
+    expected = {
+        CONF_SENSOR: [
+            {
+                CONF_ID: TEST_SENSOR_ID_1,
+                TEST_OBJECT_NAME_1: {
+                    CONF_ID: TEST_SENSOR_ID_2,
+                    CONF_NAME: TEST_SENSOR_NAME_2,
+                },
+            }
+        ],
+    }
+
+    actual = do_extensions_pass(config)
+    assert actual == expected
+
+
+def test_not_found():
+    """
+    Ensure that a non-matching ID is reported.
+    """
+    config = {
+        CONF_SENSOR: [
+            {
+                CONF_ID: TEST_SENSOR_ID_1,
+            }
+        ],
+        CONF_EXTENSIONS: {
+            TEST_SENSOR_ID_2: {
+                CONF_NAME: TEST_SENSOR_NAME_1,
+            }
+        },
+    }
+
+    with pytest.raises(cv.MultipleInvalid, match=f"extension ID {TEST_SENSOR_ID_2}"):
+        do_extensions_pass(config)
diff --git a/tests/test_extensions.yaml b/tests/test_extensions.yaml
new file mode 100644
index 0000000000..538e62b62a
--- /dev/null
+++ b/tests/test_extensions.yaml
@@ -0,0 +1,47 @@
+---
+substitutions:
+  devicename: extensions
+  sensorname: my
+  textname: template
+  roomname: living_room
+
+esphome:
+  name: extensions
+  platform: ESP32
+  board: nodemcu-32s
+  build_path: build/extensions
+
+i2c:
+  sda:
+    number: 21
+  scl:
+    number: 22
+  id: i2c_bus
+
+sensor:
+  - id: sensor_1
+    platform: template
+
+  - id: ${roomname}
+    platform: template
+
+  - <<: !include test_packages/test_uptime_sensor.yaml
+
+  - platform: bmp280
+    temperature:
+      id: temperature
+      name: Outside Temperature
+    pressure:
+      name: Outside Pressure
+    address: 0x77
+    i2c_id: i2c_bus
+
+extensions:
+  sensor_1:
+    name: ${sensorname}
+  ${roomname}:
+    name: sensor_name
+  ${devicename}_uptime_pcg:
+    update_interval: 10min
+  temperature:
+    oversampling: 8x