diff --git a/querybook/webapp/hooks/queryEditor/extensions/useKeyMapExtension.ts b/querybook/webapp/hooks/queryEditor/extensions/useKeyMapExtension.ts
index 26b24b3fa..fc9630e34 100644
--- a/querybook/webapp/hooks/queryEditor/extensions/useKeyMapExtension.ts
+++ b/querybook/webapp/hooks/queryEditor/extensions/useKeyMapExtension.ts
@@ -2,7 +2,6 @@ import { KeyBinding, keymap, Prec } from '@uiw/react-codemirror';
 import { useCallback, useMemo } from 'react';
 
 import { CodeMirrorKeyMap } from 'lib/codemirror';
-import { indentLess, insertTab } from '@codemirror/commands';
 
 export const useKeyMapExtension = ({
     keyMap = {},
@@ -41,7 +40,6 @@ export const useKeyMapExtension = ({
                     })),
                 ])
             ),
-            keymap.of([{ key: 'Tab', run: insertTab, shift: indentLess }]),
         ],
         [keyBindings, keyMap, transformKey]
     );
diff --git a/querybook/webapp/hooks/queryEditor/extensions/useOptionsExtension.ts b/querybook/webapp/hooks/queryEditor/extensions/useOptionsExtension.ts
index 0aa30fc62..4128f7e86 100644
--- a/querybook/webapp/hooks/queryEditor/extensions/useOptionsExtension.ts
+++ b/querybook/webapp/hooks/queryEditor/extensions/useOptionsExtension.ts
@@ -1,7 +1,41 @@
+import { indentLess, indentMore, insertTab } from '@codemirror/commands';
 import { indentUnit } from '@codemirror/language';
-import { EditorView } from '@uiw/react-codemirror';
+import { EditorSelection, EditorState, Extension } from '@codemirror/state';
+import { EditorView, keymap } from '@uiw/react-codemirror';
 import { useMemo } from 'react';
-import { EditorState, Extension } from '@codemirror/state';
+
+const handleTabKey =
+    (indentWithTabs: boolean, tabSize: number) =>
+    ({ state, dispatch }) => {
+        // If there is a selection, indent the selection
+        if (!state.selection.main.empty) {
+            return indentMore({ state, dispatch });
+        }
+
+        // If user chooses to use a real tab, insert a real tab
+        if (indentWithTabs) {
+            return insertTab({ state, dispatch });
+        }
+
+        // Insert 2 or 4 spaces instead of a real tab to reach the next tab stop
+        const changes = state.changeByRange((range) => {
+            const line = state.doc.lineAt(range.from);
+            const column = range.from - line.from;
+            const spacesToInsert = tabSize - (column % tabSize);
+
+            return {
+                changes: {
+                    from: range.from,
+                    to: range.to,
+                    insert: ' '.repeat(spacesToInsert),
+                },
+                range: EditorSelection.cursor(range.from + spacesToInsert),
+            };
+        });
+
+        dispatch(state.update(changes, { userEvent: 'input' }));
+        return true;
+    };
 
 export const useOptionsExtension = ({
     lineWrapping = true,
@@ -15,11 +49,21 @@ export const useOptionsExtension = ({
 
         if (options.indentWithTabs) {
             extensions.push(indentUnit.of('\t'));
-            extensions.push(EditorState.tabSize.of(options.tabSize));
         } else {
+            extensions.push(EditorState.tabSize.of(options.tabSize));
             extensions.push(indentUnit.of(' '.repeat(options.indentUnit)));
         }
 
+        extensions.push(
+            keymap.of([
+                {
+                    key: 'Tab',
+                    run: handleTabKey(options.indentWithTabs, options.tabSize),
+                    shift: indentLess,
+                },
+            ])
+        );
+
         if (lineWrapping) {
             extensions.push(EditorView.lineWrapping);
         }