diff --git a/.changeset/rude-rockets-hope.md b/.changeset/rude-rockets-hope.md
new file mode 100644
index 00000000..d3099e49
--- /dev/null
+++ b/.changeset/rude-rockets-hope.md
@@ -0,0 +1,5 @@
+---
+'@xyflow/svelte': patch
+---
+
+Added ability to set global nodeExtent
diff --git a/.changeset/twenty-ads-breathe.md b/.changeset/twenty-ads-breathe.md
new file mode 100644
index 00000000..f63a3add
--- /dev/null
+++ b/.changeset/twenty-ads-breathe.md
@@ -0,0 +1,7 @@
+---
+'@xyflow/react': patch
+'@xyflow/svelte': patch
+'@xyflow/system': patch
+---
+
+Fix extent on nodes not working properly
diff --git a/examples/react/src/examples/Subflow/index.tsx b/examples/react/src/examples/Subflow/index.tsx
index 74654870..0f59a97e 100644
--- a/examples/react/src/examples/Subflow/index.tsx
+++ b/examples/react/src/examples/Subflow/index.tsx
@@ -13,9 +13,9 @@ import {
   MiniMap,
   Background,
   Panel,
-  NodeOrigin,
   useUpdateNodeInternals,
   ReactFlowProvider,
+  CoordinateExtent,
 } from '@xyflow/react';
 
 import DebugNode from './DebugNode';
@@ -27,11 +27,20 @@ const onEdgeClick = (_: MouseEvent, edge: Edge) => console.log('click', edge);
 
 const defaultViewport = { x: 0, y: 0, zoom: 1.5 };
 const initialNodes: Node[] = [
+  {
+    id: 'extent',
+    position: { x: 0, y: 0 },
+    width: 1000,
+    height: 1000,
+    data: { label: 'Extent' },
+    origin: [0, 0],
+    zIndex: -1,
+  },
   {
     id: '1',
     type: 'input',
     data: { label: 'Node 1' },
-    position: { x: 250, y: 5 },
+    position: { x: -200, y: -500 },
     className: 'light',
     origin: [0.5, 0.5],
   },
@@ -40,7 +49,7 @@ const initialNodes: Node[] = [
     data: { label: 'Node 4' },
     position: { x: 100, y: 200 },
     className: 'light',
-    origin: [0.5, 0.5],
+    origin: [0, 0],
     style: {
       backgroundColor: 'rgba(255,50, 50, 0.5)',
       width: 500,
@@ -50,14 +59,13 @@ const initialNodes: Node[] = [
   {
     id: '4a',
     data: { label: 'Node 4a' },
-    position: { x: 15, y: 15 },
+    position: { x: -15, y: -15 },
     className: 'light',
     parentId: '4',
-    origin: [0.5, 0.5],
-
+    origin: [0, 0],
     extent: [
       [0, 0],
-      [100, 100],
+      [300, 100],
     ],
   },
   {
@@ -98,9 +106,13 @@ const initialNodes: Node[] = [
   {
     id: '5a',
     data: { label: 'Node 5a' },
-    position: { x: 0, y: 0 },
+    position: { x: -100, y: -100 },
     className: 'light',
     parentId: '5',
+    // extent: [
+    //   [0, 0],
+    //   [300, 300],
+    // ],
     extent: 'parent',
   },
   {
@@ -151,6 +163,11 @@ const nodeTypes = {
   default: DebugNode,
 };
 
+const nodeExtent: CoordinateExtent = [
+  [0, 0],
+  [1000, 1000],
+];
+
 const Subflow = () => {
   const [rfInstance, setRfInstance] = useState<ReactFlowInstance | null>(null);
   const updateNodeInternals = useUpdateNodeInternals();
@@ -220,6 +237,7 @@ const Subflow = () => {
       nodeTypes={nodeTypes}
       fitView
       nodeOrigin={[0, 0]}
+      nodeExtent={nodeExtent}
     >
       <MiniMap />
       <Controls />
@@ -239,7 +257,7 @@ const Subflow = () => {
 };
 
 export default () => (
-  <ReactFlowProvider>
+  <ReactFlowProvider nodeExtent={nodeExtent}>
     <Subflow />
   </ReactFlowProvider>
 );
diff --git a/packages/react/src/components/NodeWrapper/index.tsx b/packages/react/src/components/NodeWrapper/index.tsx
index adc6f393..5f528486 100644
--- a/packages/react/src/components/NodeWrapper/index.tsx
+++ b/packages/react/src/components/NodeWrapper/index.tsx
@@ -2,7 +2,6 @@ import { type MouseEvent, type KeyboardEvent } from 'react';
 import cc from 'classcat';
 import { shallow } from 'zustand/shallow';
 import {
-  clampPosition,
   elementSelectionKeys,
   errorMessages,
   getNodeDimensions,
@@ -87,10 +86,6 @@ export function NodeWrapper<NodeType extends Node>({
 
   const nodeDimensions = getNodeDimensions(node);
   const inlineDimensions = getNodeInlineStyleDimensions(node);
-  // TODO: clamping should happen earlier
-  const clampedPosition = nodeExtent
-    ? clampPosition(internals.positionAbsolute, nodeExtent)
-    : internals.positionAbsolute;
 
   const hasPointerEvents = isSelectable || isDraggable || onClick || onMouseEnter || onMouseMove || onMouseLeave;
 
@@ -146,7 +141,7 @@ export function NodeWrapper<NodeType extends Node>({
       store.setState({
         ariaLiveMessage: `Moved selected node ${event.key
           .replace('Arrow', '')
-          .toLowerCase()}. New position, x: ${~~clampedPosition.x}, y: ${~~clampedPosition.y}`,
+          .toLowerCase()}. New position, x: ${~~internals.positionAbsolute.x}, y: ${~~internals.positionAbsolute.y}`,
       });
 
       moveSelectedNodes({
@@ -177,7 +172,7 @@ export function NodeWrapper<NodeType extends Node>({
       ref={nodeRef}
       style={{
         zIndex: internals.z,
-        transform: `translate(${clampedPosition.x}px,${clampedPosition.y}px)`,
+        transform: `translate(${internals.positionAbsolute.x}px,${internals.positionAbsolute.y}px)`,
         pointerEvents: hasPointerEvents ? 'all' : 'none',
         visibility: hasDimensions ? 'visible' : 'hidden',
         ...node.style,
@@ -202,8 +197,8 @@ export function NodeWrapper<NodeType extends Node>({
           id={id}
           data={node.data}
           type={nodeType}
-          positionAbsoluteX={clampedPosition.x}
-          positionAbsoluteY={clampedPosition.y}
+          positionAbsoluteX={internals.positionAbsolute.x}
+          positionAbsoluteY={internals.positionAbsolute.y}
           selected={node.selected}
           selectable={isSelectable}
           draggable={isDraggable}
diff --git a/packages/react/src/components/ReactFlowProvider/index.tsx b/packages/react/src/components/ReactFlowProvider/index.tsx
index 4843afeb..b29f5f17 100644
--- a/packages/react/src/components/ReactFlowProvider/index.tsx
+++ b/packages/react/src/components/ReactFlowProvider/index.tsx
@@ -4,7 +4,7 @@ import { Provider } from '../../contexts/StoreContext';
 import { createStore } from '../../store';
 import { BatchProvider } from '../BatchProvider';
 import type { Node, Edge } from '../../types';
-import { NodeOrigin } from '@xyflow/system';
+import { CoordinateExtent, NodeOrigin } from '@xyflow/system';
 
 export type ReactFlowProviderProps = {
   initialNodes?: Node[];
@@ -15,6 +15,7 @@ export type ReactFlowProviderProps = {
   initialHeight?: number;
   fitView?: boolean;
   nodeOrigin?: NodeOrigin;
+  nodeExtent?: CoordinateExtent;
   children: ReactNode;
 };
 
@@ -27,6 +28,7 @@ export function ReactFlowProvider({
   initialHeight: height,
   fitView,
   nodeOrigin,
+  nodeExtent,
   children,
 }: ReactFlowProviderProps) {
   const [store] = useState(() =>
@@ -39,6 +41,7 @@ export function ReactFlowProvider({
       height,
       fitView,
       nodeOrigin,
+      nodeExtent,
     })
   );
 
diff --git a/packages/react/src/container/ReactFlow/Wrapper.tsx b/packages/react/src/container/ReactFlow/Wrapper.tsx
index ce1b5a74..5856809a 100644
--- a/packages/react/src/container/ReactFlow/Wrapper.tsx
+++ b/packages/react/src/container/ReactFlow/Wrapper.tsx
@@ -3,7 +3,7 @@ import { useContext, type ReactNode } from 'react';
 import StoreContext from '../../contexts/StoreContext';
 import { ReactFlowProvider } from '../../components/ReactFlowProvider';
 import type { Node, Edge } from '../../types';
-import { NodeOrigin } from '@xyflow/system';
+import { CoordinateExtent, NodeOrigin } from '@xyflow/system';
 
 export function Wrapper({
   children,
@@ -15,6 +15,7 @@ export function Wrapper({
   height,
   fitView,
   nodeOrigin,
+  nodeExtent,
 }: {
   children: ReactNode;
   nodes?: Node[];
@@ -25,6 +26,7 @@ export function Wrapper({
   height?: number;
   fitView?: boolean;
   nodeOrigin?: NodeOrigin;
+  nodeExtent?: CoordinateExtent;
 }) {
   const isWrapped = useContext(StoreContext);
 
@@ -44,6 +46,7 @@ export function Wrapper({
       initialHeight={height}
       fitView={fitView}
       nodeOrigin={nodeOrigin}
+      nodeExtent={nodeExtent}
     >
       {children}
     </ReactFlowProvider>
diff --git a/packages/react/src/container/ReactFlow/index.tsx b/packages/react/src/container/ReactFlow/index.tsx
index d6e3e5a4..962b6846 100644
--- a/packages/react/src/container/ReactFlow/index.tsx
+++ b/packages/react/src/container/ReactFlow/index.tsx
@@ -160,7 +160,15 @@ function ReactFlow<NodeType extends Node = Node, EdgeType extends Edge = Edge>(
       data-testid="rf__wrapper"
       id={id}
     >
-      <Wrapper nodes={nodes} edges={edges} width={width} height={height} fitView={fitView} nodeOrigin={nodeOrigin}>
+      <Wrapper
+        nodes={nodes}
+        edges={edges}
+        width={width}
+        height={height}
+        fitView={fitView}
+        nodeOrigin={nodeOrigin}
+        nodeExtent={nodeExtent}
+      >
         <GraphView<NodeType, EdgeType>
           onInit={onInit}
           onNodeClick={onNodeClick}
diff --git a/packages/react/src/store/index.ts b/packages/react/src/store/index.ts
index c45d8f2d..ea06fb8b 100644
--- a/packages/react/src/store/index.ts
+++ b/packages/react/src/store/index.ts
@@ -1,6 +1,5 @@
 import { createWithEqualityFn } from 'zustand/traditional';
 import {
-  clampPosition,
   getFitViewNodes,
   fitView as fitViewSystem,
   adoptUserNodes,
@@ -15,6 +14,7 @@ import {
   ParentExpandChild,
   initialConnection,
   NodeOrigin,
+  CoordinateExtent,
 } from '@xyflow/system';
 
 import { applyEdgeChanges, applyNodeChanges, createSelectionChange, getSelectionChanges } from '../utils/changes';
@@ -30,6 +30,7 @@ const createStore = ({
   height,
   fitView,
   nodeOrigin,
+  nodeExtent,
 }: {
   nodes?: Node[];
   edges?: Edge[];
@@ -39,10 +40,11 @@ const createStore = ({
   height?: number;
   fitView?: boolean;
   nodeOrigin?: NodeOrigin;
+  nodeExtent?: CoordinateExtent;
 }) =>
   createWithEqualityFn<ReactFlowState>(
     (set, get) => ({
-      ...getInitialState({ nodes, edges, width, height, fitView, nodeOrigin, defaultNodes, defaultEdges }),
+      ...getInitialState({ nodes, edges, width, height, fitView, nodeOrigin, nodeExtent, defaultNodes, defaultEdges }),
       setNodes: (nodes: Node[]) => {
         const { nodeLookup, parentLookup, nodeOrigin, elevateNodesOnSelect } = get();
         // setNodes() is called exclusively in response to user actions:
@@ -51,7 +53,12 @@ const createStore = ({
         //
         // When this happens, we take the note objects passed by the user and extend them with fields
         // relevant for internal React Flow operations.
-        adoptUserNodes(nodes, nodeLookup, parentLookup, { nodeOrigin, elevateNodesOnSelect, checkEquality: true });
+        adoptUserNodes(nodes, nodeLookup, parentLookup, {
+          nodeOrigin,
+          nodeExtent,
+          elevateNodesOnSelect,
+          checkEquality: true,
+        });
 
         set({ nodes });
       },
@@ -87,6 +94,7 @@ const createStore = ({
           fitViewOnInitOptions,
           domNode,
           nodeOrigin,
+          nodeExtent,
           debug,
           fitViewSync,
         } = get();
@@ -96,14 +104,15 @@ const createStore = ({
           nodeLookup,
           parentLookup,
           domNode,
-          nodeOrigin
+          nodeOrigin,
+          nodeExtent
         );
 
         if (!updatedInternals) {
           return;
         }
 
-        updateAbsolutePositions(nodeLookup, parentLookup, { nodeOrigin });
+        updateAbsolutePositions(nodeLookup, parentLookup, { nodeOrigin, nodeExtent });
 
         if (params.triggerFitView) {
           // we call fitView once initially after all dimensions are set
@@ -277,24 +286,26 @@ const createStore = ({
         triggerNodeChanges(nodeChanges);
         triggerEdgeChanges(edgeChanges);
       },
-      setNodeExtent: (nodeExtent) => {
-        const { nodeLookup } = get();
+      setNodeExtent: (nextNodeExtent) => {
+        const { nodes, nodeLookup, parentLookup, nodeOrigin, elevateNodesOnSelect, nodeExtent } = get();
 
-        for (const [, node] of nodeLookup) {
-          const positionAbsolute = clampPosition(node.internals.positionAbsolute, nodeExtent);
-
-          nodeLookup.set(node.id, {
-            ...node,
-            internals: {
-              ...node.internals,
-              positionAbsolute,
-            },
-          });
+        if (
+          nextNodeExtent[0][0] === nodeExtent[0][0] &&
+          nextNodeExtent[0][1] === nodeExtent[0][1] &&
+          nextNodeExtent[1][0] === nodeExtent[1][0] &&
+          nextNodeExtent[1][1] === nodeExtent[1][1]
+        ) {
+          return;
         }
 
-        set({
-          nodeExtent,
+        adoptUserNodes(nodes, nodeLookup, parentLookup, {
+          nodeOrigin,
+          nodeExtent: nextNodeExtent,
+          elevateNodesOnSelect,
+          checkEquality: false,
         });
+
+        set({ nodeExtent: nextNodeExtent });
       },
       panBy: (delta): Promise<boolean> => {
         const { transform, width, height, panZoom, translateExtent } = get();
diff --git a/packages/react/src/store/initialState.ts b/packages/react/src/store/initialState.ts
index 279506ba..af52f2a2 100644
--- a/packages/react/src/store/initialState.ts
+++ b/packages/react/src/store/initialState.ts
@@ -9,6 +9,7 @@ import {
   getInternalNodesBounds,
   NodeOrigin,
   initialConnection,
+  CoordinateExtent,
 } from '@xyflow/system';
 
 import type { Edge, InternalNode, Node, ReactFlowStore } from '../types';
@@ -22,6 +23,7 @@ const getInitialState = ({
   height,
   fitView,
   nodeOrigin,
+  nodeExtent,
 }: {
   nodes?: Node[];
   edges?: Edge[];
@@ -31,18 +33,22 @@ const getInitialState = ({
   height?: number;
   fitView?: boolean;
   nodeOrigin?: NodeOrigin;
+  nodeExtent?: CoordinateExtent;
 } = {}): ReactFlowStore => {
   const nodeLookup = new Map<string, InternalNode>();
   const parentLookup = new Map();
   const connectionLookup = new Map();
   const edgeLookup = new Map();
+
   const storeEdges = defaultEdges ?? edges ?? [];
   const storeNodes = defaultNodes ?? nodes ?? [];
   const storeNodeOrigin = nodeOrigin ?? [0, 0];
+  const storeNodeExtent = nodeExtent ?? infiniteExtent;
 
   updateConnectionLookup(connectionLookup, edgeLookup, storeEdges);
   adoptUserNodes(storeNodes, nodeLookup, parentLookup, {
     nodeOrigin: storeNodeOrigin,
+    nodeExtent: storeNodeExtent,
     elevateNodesOnSelect: false,
   });
 
@@ -76,7 +82,7 @@ const getInitialState = ({
     minZoom: 0.5,
     maxZoom: 2,
     translateExtent: infiniteExtent,
-    nodeExtent: infiniteExtent,
+    nodeExtent: storeNodeExtent,
     nodesSelectionActive: false,
     userSelectionActive: false,
     userSelectionRect: null,
diff --git a/packages/svelte/src/lib/container/SvelteFlow/SvelteFlow.svelte b/packages/svelte/src/lib/container/SvelteFlow/SvelteFlow.svelte
index 87f061d0..4fc060a6 100644
--- a/packages/svelte/src/lib/container/SvelteFlow/SvelteFlow.svelte
+++ b/packages/svelte/src/lib/container/SvelteFlow/SvelteFlow.svelte
@@ -53,6 +53,7 @@
   export let onMoveEnd: $$Props['onMoveEnd'] = undefined;
   export let isValidConnection: $$Props['isValidConnection'] = undefined;
   export let translateExtent: $$Props['translateExtent'] = undefined;
+  export let nodeExtent: $$Props['nodeExtent'] = undefined;
   export let onlyRenderVisibleElements: $$Props['onlyRenderVisibleElements'] = undefined;
   export let panOnScrollMode: $$Props['panOnScrollMode'] = PanOnScrollMode.Free;
   export let preventScrolling: $$Props['preventScrolling'] = true;
@@ -102,7 +103,8 @@
         width,
         height,
         fitView,
-        nodeOrigin
+        nodeOrigin,
+        nodeExtent
       });
 
   onMount(() => {
diff --git a/packages/svelte/src/lib/container/SvelteFlow/types.ts b/packages/svelte/src/lib/container/SvelteFlow/types.ts
index b5e81331..0963424e 100644
--- a/packages/svelte/src/lib/container/SvelteFlow/types.ts
+++ b/packages/svelte/src/lib/container/SvelteFlow/types.ts
@@ -206,6 +206,12 @@ export type SvelteFlowProps = DOMAttributes<HTMLDivElement> & {
    * @example [[-1000, -10000], [1000, 1000]]
    */
   translateExtent?: CoordinateExtent;
+  /** By default the nodes can be placed anywhere. You can use this prop to set a boundary.
+   *
+   * The first pair of coordinates is the top left boundary and the second pair is the bottom right.
+   * @example [[-1000, -10000], [1000, 1000]]
+   */
+  nodeExtent?: CoordinateExtent;
   /** Disabling this prop will allow the user to scroll the page even when their pointer is over the flow.
    * @default true
    */
diff --git a/packages/svelte/src/lib/store/index.ts b/packages/svelte/src/lib/store/index.ts
index 9ed41bc0..24279a45 100644
--- a/packages/svelte/src/lib/store/index.ts
+++ b/packages/svelte/src/lib/store/index.ts
@@ -37,7 +37,8 @@ export function createStore({
   width,
   height,
   fitView: fitViewOnCreate,
-  nodeOrigin
+  nodeOrigin,
+  nodeExtent
 }: {
   nodes?: Node[];
   edges?: Edge[];
@@ -45,6 +46,7 @@ export function createStore({
   height?: number;
   fitView?: boolean;
   nodeOrigin?: NodeOrigin;
+  nodeExtent?: CoordinateExtent;
 }): SvelteFlowStore {
   const store = getInitialStore({
     nodes,
@@ -52,7 +54,8 @@ export function createStore({
     width,
     height,
     fitView: fitViewOnCreate,
-    nodeOrigin
+    nodeOrigin,
+    nodeExtent
   });
 
   function setNodeTypes(nodeTypes: NodeTypes) {
@@ -482,7 +485,8 @@ export function createStoreContext({
   width,
   height,
   fitView,
-  nodeOrigin
+  nodeOrigin,
+  nodeExtent
 }: {
   nodes?: Node[];
   edges?: Edge[];
@@ -490,8 +494,9 @@ export function createStoreContext({
   height?: number;
   fitView?: boolean;
   nodeOrigin?: NodeOrigin;
+  nodeExtent?: CoordinateExtent;
 }) {
-  const store = createStore({ nodes, edges, width, height, fitView, nodeOrigin });
+  const store = createStore({ nodes, edges, width, height, fitView, nodeOrigin, nodeExtent });
 
   setContext(key, {
     getStore: () => store
diff --git a/packages/svelte/src/lib/store/initial-store.ts b/packages/svelte/src/lib/store/initial-store.ts
index 5c9b9f64..142460a7 100644
--- a/packages/svelte/src/lib/store/initial-store.ts
+++ b/packages/svelte/src/lib/store/initial-store.ts
@@ -75,7 +75,8 @@ export const getInitialStore = ({
   width,
   height,
   fitView,
-  nodeOrigin
+  nodeOrigin,
+  nodeExtent
 }: {
   nodes?: Node[];
   edges?: Edge[];
@@ -83,17 +84,23 @@ export const getInitialStore = ({
   height?: number;
   fitView?: boolean;
   nodeOrigin?: NodeOrigin;
+  nodeExtent?: CoordinateExtent;
 }) => {
   const nodeLookup: NodeLookup = new Map();
   const parentLookup = new Map();
+  const connectionLookup = new Map();
+  const edgeLookup = new Map();
+
   const storeNodeOrigin = nodeOrigin ?? [0, 0];
+  const storeNodeExtent = nodeExtent ?? infiniteExtent;
+
   adoptUserNodes(nodes, nodeLookup, parentLookup, {
+    nodeExtent: storeNodeExtent,
     nodeOrigin: storeNodeOrigin,
     elevateNodesOnSelect: false,
     checkEquality: false
   });
-  const connectionLookup = new Map();
-  const edgeLookup = new Map();
+
   updateConnectionLookup(connectionLookup, edgeLookup, edges);
 
   let viewport: Viewport = { x: 0, y: 0, zoom: 1 };
@@ -107,7 +114,7 @@ export const getInitialStore = ({
 
   return {
     flowId: writable<string | null>(null),
-    nodes: createNodesStore(nodes, nodeLookup, parentLookup, storeNodeOrigin),
+    nodes: createNodesStore(nodes, nodeLookup, parentLookup, storeNodeOrigin, storeNodeExtent),
     nodeLookup: readable<NodeLookup<InternalNode>>(nodeLookup),
     parentLookup: readable<ParentLookup<InternalNode>>(parentLookup),
     edgeLookup: readable<EdgeLookup<Edge>>(edgeLookup),
@@ -121,7 +128,7 @@ export const getInitialStore = ({
     maxZoom: writable<number>(2),
     nodeOrigin: writable<NodeOrigin>(storeNodeOrigin),
     nodeDragThreshold: writable<number>(1),
-    nodeExtent: writable<CoordinateExtent>(infiniteExtent),
+    nodeExtent: writable<CoordinateExtent>(storeNodeExtent),
     translateExtent: writable<CoordinateExtent>(infiniteExtent),
     autoPanOnNodeDrag: writable<boolean>(true),
     autoPanOnConnect: writable<boolean>(true),
diff --git a/packages/svelte/src/lib/store/utils.ts b/packages/svelte/src/lib/store/utils.ts
index e0b53c46..30af8f73 100644
--- a/packages/svelte/src/lib/store/utils.ts
+++ b/packages/svelte/src/lib/store/utils.ts
@@ -15,7 +15,9 @@ import {
   type EdgeLookup,
   type NodeLookup,
   type ParentLookup,
-  type NodeOrigin
+  type NodeOrigin,
+  infiniteExtent,
+  type CoordinateExtent
 } from '@xyflow/system';
 
 import type { DefaultEdgeOptions, DefaultNodeOptions, Edge, InternalNode, Node } from '$lib/types';
@@ -131,7 +133,8 @@ export const createNodesStore = (
   nodes: Node[],
   nodeLookup: NodeLookup<InternalNode>,
   parentLookup: ParentLookup<InternalNode>,
-  nodeOrigin: NodeOrigin = [0, 0]
+  nodeOrigin: NodeOrigin = [0, 0],
+  nodeExtent: CoordinateExtent = infiniteExtent
 ): {
   subscribe: (this: void, run: Subscriber<Node[]>) => Unsubscriber;
   update: (this: void, updater: Updater<Node[]>) => void;
@@ -148,6 +151,7 @@ export const createNodesStore = (
     adoptUserNodes(nds, nodeLookup, parentLookup, {
       elevateNodesOnSelect,
       nodeOrigin,
+      nodeExtent,
       defaults,
       checkEquality: false
     });
diff --git a/packages/system/src/utils/general.ts b/packages/system/src/utils/general.ts
index 7d539fb5..533c83ee 100644
--- a/packages/system/src/utils/general.ts
+++ b/packages/system/src/utils/general.ts
@@ -16,11 +16,33 @@ import { getNodePositionWithOrigin, isInternalNodeBase } from './graph';
 
 export const clamp = (val: number, min = 0, max = 1): number => Math.min(Math.max(val, min), max);
 
-export const clampPosition = (position: XYPosition = { x: 0, y: 0 }, extent: CoordinateExtent) => ({
-  x: clamp(position.x, extent[0][0], extent[1][0]),
-  y: clamp(position.y, extent[0][1], extent[1][1]),
+export const clampPosition = (
+  position: XYPosition = { x: 0, y: 0 },
+  extent: CoordinateExtent,
+  dimensions: Partial<Dimensions>
+) => ({
+  x: clamp(position.x, extent[0][0], extent[1][0] - (dimensions?.width ?? 0)),
+  y: clamp(position.y, extent[0][1], extent[1][1] - (dimensions?.height ?? 0)),
 });
 
+export function clampPositionToParent<NodeType extends NodeBase>(
+  childPosition: XYPosition,
+  childDimensions: Dimensions,
+  parent: InternalNodeBase<NodeType>
+) {
+  const { width: parentWidth, height: parentHeight } = getNodeDimensions(parent);
+  const { x: parentX, y: parentY } = parent.internals.positionAbsolute;
+
+  return clampPosition(
+    childPosition,
+    [
+      [parentX, parentY],
+      [parentX + parentWidth, parentY + parentHeight],
+    ],
+    childDimensions
+  );
+}
+
 /**
  * Calculates the velocity of panning when the mouse is close to the edge of the canvas
  * @internal
diff --git a/packages/system/src/utils/graph.ts b/packages/system/src/utils/graph.ts
index 0bf8c784..ddec917c 100644
--- a/packages/system/src/utils/graph.ts
+++ b/packages/system/src/utils/graph.ts
@@ -297,24 +297,6 @@ export async function fitView<Params extends FitViewParamsBase<NodeBase>, Option
   return Promise.resolve(true);
 }
 
-/**
- * This function clamps the passed extend by the node's width and height.
- * This is needed to prevent the node from being dragged outside of its extent.
- *
- * @param node
- * @param extent
- * @returns
- */
-function clampNodeExtent<NodeType extends NodeBase>(
-  node: NodeType,
-  extent?: CoordinateExtent | 'parent'
-): CoordinateExtent | 'parent' | undefined {
-  if (!extent || extent === 'parent') {
-    return extent;
-  }
-  return [extent[0], [extent[1][0] - (node.measured?.width ?? 0), extent[1][1] - (node.measured?.height ?? 0)]];
-}
-
 /**
  * This function calculates the next position of a node, taking into account the node's extent, parent node, and origin.
  *
@@ -339,40 +321,37 @@ export function calculateNodePosition<NodeType extends NodeBase>({
   const node = nodeLookup.get(nodeId)!;
   const parentNode = node.parentId ? nodeLookup.get(node.parentId) : undefined;
   const { x: parentX, y: parentY } = parentNode ? parentNode.internals.positionAbsolute : { x: 0, y: 0 };
-  const origin = node.origin ?? nodeOrigin;
 
-  let currentExtent = clampNodeExtent(node, node.extent || nodeExtent);
+  const origin = node.origin ?? nodeOrigin;
+  let extent = nodeExtent;
 
   if (node.extent === 'parent' && !node.expandParent) {
     if (!parentNode) {
       onError?.('005', errorMessages['error005']());
     } else {
-      const nodeWidth = node.measured.width;
-      const nodeHeight = node.measured.height;
       const parentWidth = parentNode.measured.width;
       const parentHeight = parentNode.measured.height;
 
-      if (nodeWidth && nodeHeight && parentWidth && parentHeight) {
-        currentExtent = [
+      if (parentWidth && parentHeight) {
+        extent = [
           [parentX, parentY],
-          [parentX + parentWidth - nodeWidth, parentY + parentHeight - nodeHeight],
+          [parentX + parentWidth, parentY + parentHeight],
         ];
       }
     }
   } else if (parentNode && isCoordinateExtent(node.extent)) {
-    currentExtent = [
+    extent = [
       [node.extent[0][0] + parentX, node.extent[0][1] + parentY],
       [node.extent[1][0] + parentX, node.extent[1][1] + parentY],
     ];
   }
 
-  const positionAbsolute = isCoordinateExtent(currentExtent)
-    ? clampPosition(nextPosition, currentExtent)
+  const positionAbsolute = isCoordinateExtent(extent)
+    ? clampPosition(nextPosition, extent, node.measured)
     : nextPosition;
 
   return {
     position: {
-      // TODO: is there a better way to do this?
       x: positionAbsolute.x - parentX + node.measured.width! * origin[0],
       y: positionAbsolute.y - parentY + node.measured.height! * origin[1],
     },
diff --git a/packages/system/src/utils/store.ts b/packages/system/src/utils/store.ts
index f2cf1bfd..73b6afc9 100644
--- a/packages/system/src/utils/store.ts
+++ b/packages/system/src/utils/store.ts
@@ -1,3 +1,4 @@
+import { infiniteExtent } from '..';
 import {
   NodeBase,
   CoordinateExtent,
@@ -17,37 +18,60 @@ import {
   ParentLookup,
 } from '../types';
 import { getDimensions, getHandleBounds } from './dom';
-import { getBoundsOfRects, getNodeDimensions, isNumeric, nodeToRect } from './general';
+import {
+  clampPosition,
+  clampPositionToParent,
+  getBoundsOfRects,
+  getNodeDimensions,
+  isCoordinateExtent,
+  isNumeric,
+  nodeToRect,
+} from './general';
 import { getNodePositionWithOrigin } from './graph';
 import { ParentExpandChild } from './types';
 
 const defaultOptions = {
   nodeOrigin: [0, 0] as NodeOrigin,
+  nodeExtent: infiniteExtent,
   elevateNodesOnSelect: true,
   defaults: {},
 };
+
 const adoptUserNodesDefaultOptions = {
   ...defaultOptions,
   checkEquality: true,
 };
 
+function mergeObjects<T extends Record<string, any>>(base: T, incoming?: Partial<T>): T {
+  const result = { ...base };
+  for (const key in incoming) {
+    if (incoming[key] !== undefined) {
+      // typecast is safe here, because we check for undefined
+      result[key] = (incoming as T)[key]!;
+    }
+  }
+
+  return result;
+}
+
 export function updateAbsolutePositions<NodeType extends NodeBase>(
   nodeLookup: NodeLookup<InternalNodeBase<NodeType>>,
   parentLookup: ParentLookup<InternalNodeBase<NodeType>>,
   options?: UpdateNodesOptions<NodeType>
 ) {
-  const _options = { ...defaultOptions, ...options };
+  const _options = mergeObjects(defaultOptions, options);
   for (const node of nodeLookup.values()) {
     if (!node.parentId) {
       continue;
     }
 
-    updateChildPosition(node, nodeLookup, parentLookup, _options);
+    updateChildNode(node, nodeLookup, parentLookup, _options);
   }
 }
 
 type UpdateNodesOptions<NodeType extends NodeBase> = {
   nodeOrigin?: NodeOrigin;
+  nodeExtent?: CoordinateExtent;
   elevateNodesOnSelect?: boolean;
   defaults?: Partial<NodeType>;
   checkEquality?: boolean;
@@ -59,18 +83,23 @@ export function adoptUserNodes<NodeType extends NodeBase>(
   parentLookup: ParentLookup<InternalNodeBase<NodeType>>,
   options?: UpdateNodesOptions<NodeType>
 ) {
-  const _options = { ...adoptUserNodesDefaultOptions, ...options };
+  const _options = mergeObjects(adoptUserNodesDefaultOptions, options);
   const tmpLookup = new Map(nodeLookup);
+  const selectedNodeZ: number = _options?.elevateNodesOnSelect ? 1000 : 0;
+
   nodeLookup.clear();
   parentLookup.clear();
 
-  const selectedNodeZ: number = options?.elevateNodesOnSelect ? 1000 : 0;
-
   for (const userNode of nodes) {
     let internalNode = tmpLookup.get(userNode.id);
+
     if (_options.checkEquality && userNode === internalNode?.internals.userNode) {
       nodeLookup.set(userNode.id, internalNode);
     } else {
+      const positionWithOrigin = getNodePositionWithOrigin(userNode, _options.nodeOrigin);
+      const extent = isCoordinateExtent(userNode.extent) ? userNode.extent : _options.nodeExtent;
+      const clampedPosition = clampPosition(positionWithOrigin, extent, getNodeDimensions(userNode));
+
       internalNode = {
         ..._options.defaults,
         ...userNode,
@@ -79,30 +108,50 @@ export function adoptUserNodes<NodeType extends NodeBase>(
           height: userNode.measured?.height,
         },
         internals: {
-          positionAbsolute: getNodePositionWithOrigin(userNode, _options.nodeOrigin),
+          positionAbsolute: clampedPosition,
           // if user re-initializes the node or removes `measured` for whatever reason, we reset the handleBounds so that the node gets re-measured
           handleBounds: !userNode.measured ? undefined : internalNode?.internals.handleBounds,
           z: calculateZ(userNode, selectedNodeZ),
           userNode,
         },
       };
+
       nodeLookup.set(userNode.id, internalNode);
     }
 
     if (userNode.parentId) {
-      updateChildPosition(internalNode, nodeLookup, parentLookup, options);
+      updateChildNode(internalNode, nodeLookup, parentLookup, options);
     }
   }
 }
 
-function updateChildPosition<NodeType extends NodeBase>(
+function updateParentLookup<NodeType extends NodeBase>(
+  node: InternalNodeBase<NodeType>,
+  parentLookup: ParentLookup<InternalNodeBase<NodeType>>
+) {
+  if (!node.parentId) {
+    return;
+  }
+
+  const childNodes = parentLookup.get(node.parentId);
+
+  if (childNodes) {
+    childNodes.set(node.id, node);
+  } else {
+    parentLookup.set(node.parentId, new Map([[node.id, node]]));
+  }
+}
+
+/**
+ * Updates positionAbsolute and zIndex of a child node and the parentLookup.
+ */
+function updateChildNode<NodeType extends NodeBase>(
   node: InternalNodeBase<NodeType>,
   nodeLookup: NodeLookup<InternalNodeBase<NodeType>>,
   parentLookup: ParentLookup<InternalNodeBase<NodeType>>,
   options?: UpdateNodesOptions<NodeType>
 ) {
-  const _options = { ...defaultOptions, ...options };
-
+  const { elevateNodesOnSelect, nodeOrigin, nodeExtent } = mergeObjects(defaultOptions, options);
   const parentId = node.parentId!;
   const parentNode = nodeLookup.get(parentId);
 
@@ -113,25 +162,17 @@ function updateChildPosition<NodeType extends NodeBase>(
     return;
   }
 
-  // update the parentLookup
-  const childNodes = parentLookup.get(parentId);
-  if (childNodes) {
-    childNodes.set(node.id, node);
-  } else {
-    parentLookup.set(parentId, new Map([[node.id, node]]));
-  }
+  updateParentLookup(node, parentLookup);
 
-  const selectedNodeZ: number = options?.elevateNodesOnSelect ? 1000 : 0;
-
-  const { x, y, z } = calculateChildXYZ(node, parentNode, _options.nodeOrigin!, selectedNodeZ);
-
-  const currPosition = node.internals.positionAbsolute;
-  const positionChanged = x !== currPosition.x || y !== currPosition.y;
+  const selectedNodeZ = elevateNodesOnSelect ? 1000 : 0;
+  const { x, y, z } = calculateChildXYZ(node, parentNode, nodeOrigin, nodeExtent, selectedNodeZ);
+  const { positionAbsolute } = node.internals;
+  const positionChanged = x !== positionAbsolute.x || y !== positionAbsolute.y;
 
   if (positionChanged || z !== node.internals.z) {
     node.internals = {
       ...node.internals,
-      positionAbsolute: positionChanged ? { x, y } : currPosition,
+      positionAbsolute: positionChanged ? { x, y } : positionAbsolute,
       z,
     };
   }
@@ -145,15 +186,32 @@ function calculateChildXYZ<NodeType extends NodeBase>(
   childNode: InternalNodeBase<NodeType>,
   parentNode: InternalNodeBase<NodeType>,
   nodeOrigin: NodeOrigin,
+  nodeExtent: CoordinateExtent,
   selectedNodeZ: number
 ) {
-  const position = getNodePositionWithOrigin(childNode, nodeOrigin);
+  const { x: parentX, y: parentY } = parentNode.internals.positionAbsolute;
+  const childDimensions = getNodeDimensions(childNode);
+  const positionWithOrigin = getNodePositionWithOrigin(childNode, nodeOrigin);
+  const clampedPosition = isCoordinateExtent(childNode.extent)
+    ? clampPosition(positionWithOrigin, childNode.extent, childDimensions)
+    : positionWithOrigin;
+
+  let absolutePosition = clampPosition(
+    { x: parentX + clampedPosition.x, y: parentY + clampedPosition.y },
+    nodeExtent,
+    childDimensions
+  );
+
+  if (childNode.extent === 'parent') {
+    absolutePosition = clampPositionToParent(absolutePosition, childDimensions, parentNode);
+  }
+
   const childZ = calculateZ(childNode, selectedNodeZ);
   const parentZ = parentNode.internals.z ?? 0;
 
   return {
-    x: parentNode.internals.positionAbsolute.x + position.x,
-    y: parentNode.internals.positionAbsolute.y + position.y,
+    x: absolutePosition.x,
+    y: absolutePosition.y,
     z: parentZ > childZ ? parentZ : childZ,
   };
 }
@@ -249,7 +307,8 @@ export function updateNodeInternals<NodeType extends InternalNodeBase>(
   nodeLookup: NodeLookup<NodeType>,
   parentLookup: ParentLookup<NodeType>,
   domNode: HTMLElement | null,
-  nodeOrigin?: NodeOrigin
+  nodeOrigin?: NodeOrigin,
+  nodeExtent?: CoordinateExtent
 ): { changes: (NodeDimensionChange | NodePositionChange)[]; updatedInternals: boolean } {
   const viewportNode = domNode?.querySelector('.xyflow__viewport');
   let updatedInternals = false;
@@ -287,18 +346,26 @@ export function updateNodeInternals<NodeType extends InternalNodeBase>(
 
       if (doUpdate) {
         const nodeBounds = update.nodeElement.getBoundingClientRect();
+        const extent = isCoordinateExtent(node.extent) ? node.extent : nodeExtent;
+        let { positionAbsolute } = node.internals;
+
+        if (node.parentId && node.extent === 'parent') {
+          positionAbsolute = clampPositionToParent(positionAbsolute, dimensions, nodeLookup.get(node.parentId)!);
+        } else if (extent) {
+          positionAbsolute = clampPosition(positionAbsolute, extent, dimensions);
+        }
 
         node.measured = dimensions;
         node.internals = {
           ...node.internals,
-          positionAbsolute: getNodePositionWithOrigin(node, nodeOrigin),
+          positionAbsolute,
           handleBounds: {
             source: getHandleBounds('source', update.nodeElement, nodeBounds, zoom, node.id),
             target: getHandleBounds('target', update.nodeElement, nodeBounds, zoom, node.id),
           },
         };
         if (node.parentId) {
-          updateChildPosition(node, nodeLookup, parentLookup, { nodeOrigin });
+          updateChildNode(node, nodeLookup, parentLookup, { nodeOrigin });
         }
 
         updatedInternals = true;