diff --git a/cypress/composables/workflow.ts b/cypress/composables/workflow.ts
index 7d783c1d3c..ff9788349b 100644
--- a/cypress/composables/workflow.ts
+++ b/cypress/composables/workflow.ts
@@ -356,5 +356,5 @@ export function openContextMenu(
 }
 
 export function clickContextMenuAction(action: string) {
-	getContextMenuAction(action).click();
+	getContextMenuAction(action).click({ force: true });
 }
diff --git a/packages/frontend/@n8n/design-system/src/components/N8nKeyboardShortcut/N8nKeyboardShortcut.vue b/packages/frontend/@n8n/design-system/src/components/N8nKeyboardShortcut/N8nKeyboardShortcut.vue
index ea237e5531..b95eff1b0e 100644
--- a/packages/frontend/@n8n/design-system/src/components/N8nKeyboardShortcut/N8nKeyboardShortcut.vue
+++ b/packages/frontend/@n8n/design-system/src/components/N8nKeyboardShortcut/N8nKeyboardShortcut.vue
@@ -14,16 +14,16 @@ const keys = computed(() => {
 		allKeys.unshift('⌘');
 	}
 
-	if (props.shiftKey) {
-		allKeys.unshift('⇧');
+	if (props.metaKey && !isMacOs) {
+		allKeys.unshift('Ctrl');
 	}
 
 	if (props.altKey) {
 		allKeys.unshift(isMacOs ? '⌥' : 'Alt');
 	}
 
-	if (props.metaKey && !isMacOs) {
-		allKeys.unshift('Ctrl');
+	if (props.shiftKey) {
+		allKeys.unshift('⇧');
 	}
 
 	return allKeys;
diff --git a/packages/frontend/editor-ui/package.json b/packages/frontend/editor-ui/package.json
index 3e2ab0662f..1b4b6fd0a2 100644
--- a/packages/frontend/editor-ui/package.json
+++ b/packages/frontend/editor-ui/package.json
@@ -29,6 +29,7 @@
     "@codemirror/search": "^6.5.6",
     "@codemirror/state": "^6.4.1",
     "@codemirror/view": "^6.26.3",
+    "@dagrejs/dagre": "^1.1.4",
     "@fontsource/open-sans": "^4.5.0",
     "@lezer/common": "1.1.0",
     "@n8n/api-types": "workspace:*",
diff --git a/packages/frontend/editor-ui/src/__tests__/data/canvas.ts b/packages/frontend/editor-ui/src/__tests__/data/canvas.ts
index fbbbb8b0aa..08330730c3 100644
--- a/packages/frontend/editor-ui/src/__tests__/data/canvas.ts
+++ b/packages/frontend/editor-ui/src/__tests__/data/canvas.ts
@@ -12,9 +12,9 @@ import type {
 } from '@/types';
 import { CanvasConnectionMode, CanvasNodeRenderType } from '@/types';
 import { NodeConnectionType } from 'n8n-workflow';
+import type { GraphEdge, GraphNode, ViewportTransform } from '@vue-flow/core';
 import type { EventBus } from '@n8n/utils/event-bus';
 import { createEventBus } from '@n8n/utils/event-bus';
-import type { ViewportTransform } from '@vue-flow/core';
 
 export function createCanvasNodeData({
 	id = 'node',
@@ -69,6 +69,35 @@ export function createCanvasNodeElement({
 	};
 }
 
+export function createCanvasGraphNode({
+	id = '1',
+	type = 'default',
+	label = 'Node',
+	position = { x: 100, y: 100 },
+	dimensions = { width: 100, height: 100 },
+	data,
+	...rest
+}: Partial<
+	Omit<GraphNode<CanvasNodeData>, 'data'> & { data: Partial<CanvasNodeData> }
+> = {}): GraphNode<CanvasNodeData> {
+	return {
+		id,
+		type,
+		label,
+		position,
+		computedPosition: { ...position, z: 0 },
+		dimensions,
+		dragging: false,
+		isParent: false,
+		selected: false,
+		resizing: false,
+		handleBounds: {},
+		events: {},
+		data: createCanvasNodeData({ id, type, ...data }),
+		...rest,
+	};
+}
+
 export function createCanvasNodeProps({
 	id = 'node',
 	label = 'Test Node',
@@ -196,3 +225,30 @@ export function createCanvasConnection(
 		...(nodeBInput ? { targetHandle: `inputs/${nodeBInput.type}/${nodeBInput.index}` } : {}),
 	};
 }
+
+export function createCanvasGraphEdge(
+	nodeA: GraphNode,
+	nodeB: GraphNode,
+	{ sourceIndex = 0, targetIndex = 0 } = {},
+): GraphEdge {
+	const nodeAOutput = nodeA.data?.outputs[sourceIndex];
+	const nodeBInput = nodeA.data?.inputs[targetIndex];
+
+	return {
+		id: `${nodeA.id}-${nodeB.id}`,
+		source: nodeA.id,
+		target: nodeB.id,
+		sourceX: nodeA.position.x,
+		sourceY: nodeA.position.y,
+		targetX: nodeB.position.x,
+		targetY: nodeB.position.y,
+		type: 'default',
+		selected: false,
+		sourceNode: nodeA,
+		targetNode: nodeB,
+		data: {},
+		events: {},
+		...(nodeAOutput ? { sourceHandle: `outputs/${nodeAOutput.type}/${nodeAOutput.index}` } : {}),
+		...(nodeBInput ? { targetHandle: `inputs/${nodeBInput.type}/${nodeBInput.index}` } : {}),
+	};
+}
diff --git a/packages/frontend/editor-ui/src/components/TidyUpIcon.vue b/packages/frontend/editor-ui/src/components/TidyUpIcon.vue
new file mode 100644
index 0000000000..a6faf6b561
--- /dev/null
+++ b/packages/frontend/editor-ui/src/components/TidyUpIcon.vue
@@ -0,0 +1,8 @@
+<template>
+	<svg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 16 16">
+		<path
+			fill="currentColor"
+			d="M1.6.13c-.18-.17-.47-.18-.62 0L.56.57.14.98c-.2.15-.18.44 0 .62l3.63 3.6c.1.1.1.27 0 .37-.2.2-.53.52-.93.94-.56.57-.12 1.62.22 2.11.05.07.12.1.2.1.05-.01.1-.04.15-.08l5.23-5.22c.1-.1.1-.26-.02-.34-.5-.34-1.55-.78-2.12-.22-.42.4-.75.73-.94.93-.1.1-.27.1-.37 0L1.6.13ZM9.5 3.9c.07-.09.2-.1.3-.04l6.07 3.44c.15.08.18.29.05.4l-1.21 1.22a.26.26 0 0 1-.26.07l-2.18-.64a.26.26 0 0 0-.32.33l.76 2.02c.04.1.01.2-.06.27L7.7 15.92a.26.26 0 0 1-.41-.05L3.83 9.8a.26.26 0 0 1 .04-.3l5.62-5.6Z"
+		/>
+	</svg>
+</template>
diff --git a/packages/frontend/editor-ui/src/components/canvas/Canvas.vue b/packages/frontend/editor-ui/src/components/canvas/Canvas.vue
index a9d1056a01..918b0b06a3 100644
--- a/packages/frontend/editor-ui/src/components/canvas/Canvas.vue
+++ b/packages/frontend/editor-ui/src/components/canvas/Canvas.vue
@@ -18,7 +18,17 @@ import { useVueFlow, VueFlow, PanelPosition, MarkerType } from '@vue-flow/core';
 import { MiniMap } from '@vue-flow/minimap';
 import Node from './elements/nodes/CanvasNode.vue';
 import Edge from './elements/edges/CanvasEdge.vue';
-import { computed, onMounted, onUnmounted, provide, ref, toRef, useCssModule, watch } from 'vue';
+import {
+	computed,
+	nextTick,
+	onMounted,
+	onUnmounted,
+	provide,
+	ref,
+	toRef,
+	useCssModule,
+	watch,
+} from 'vue';
 import type { EventBus } from '@n8n/utils/event-bus';
 import { createEventBus } from '@n8n/utils/event-bus';
 import { useDeviceSupport } from '@n8n/composables/useDeviceSupport';
@@ -37,6 +47,7 @@ import CanvasBackground from './elements/background/CanvasBackground.vue';
 import { useCanvasTraversal } from '@/composables/useCanvasTraversal';
 import { NodeConnectionType } from 'n8n-workflow';
 import { useCanvasNodeHover } from '@/composables/useCanvasNodeHover';
+import { useCanvasLayout } from '@/composables/useCanvasLayout';
 
 const $style = useCssModule();
 
@@ -139,6 +150,7 @@ const {
 	getDownstreamNodes,
 	getUpstreamNodes,
 } = useCanvasTraversal(vueFlow);
+const { layout } = useCanvasLayout({ id: props.id });
 
 const isPaneReady = ref(false);
 
@@ -245,38 +257,43 @@ function selectUpstreamNodes(id: string) {
 	onSelectNodes({ ids: [...upstreamNodes.map((node) => node.id), id] });
 }
 
-const keyMap = computed(() => ({
-	ctrl_c: emitWithSelectedNodes((ids) => emit('copy:nodes', ids)),
-	enter: emitWithLastSelectedNode((id) => onSetNodeActivated(id)),
-	ctrl_a: () => addSelectedNodes(graphNodes.value),
-	// Support both key and code for zooming in and out
-	'shift_+|+|=|shift_Equal|Equal': async () => await onZoomIn(),
-	'shift+_|-|_|shift_Minus|Minus': async () => await onZoomOut(),
-	0: async () => await onResetZoom(),
-	1: async () => await onFitView(),
-	ArrowUp: emitWithLastSelectedNode(selectUpperSiblingNode),
-	ArrowDown: emitWithLastSelectedNode(selectLowerSiblingNode),
-	ArrowLeft: emitWithLastSelectedNode(selectLeftNode),
-	ArrowRight: emitWithLastSelectedNode(selectRightNode),
-	shift_ArrowLeft: emitWithLastSelectedNode(selectUpstreamNodes),
-	shift_ArrowRight: emitWithLastSelectedNode(selectDownstreamNodes),
+const keyMap = computed(() => {
+	const readOnlyKeymap = {
+		ctrl_c: emitWithSelectedNodes((ids) => emit('copy:nodes', ids)),
+		enter: emitWithLastSelectedNode((id) => onSetNodeActivated(id)),
+		ctrl_a: () => addSelectedNodes(graphNodes.value),
+		// Support both key and code for zooming in and out
+		'shift_+|+|=|shift_Equal|Equal': async () => await onZoomIn(),
+		'shift+_|-|_|shift_Minus|Minus': async () => await onZoomOut(),
+		0: async () => await onResetZoom(),
+		1: async () => await onFitView(),
+		ArrowUp: emitWithLastSelectedNode(selectUpperSiblingNode),
+		ArrowDown: emitWithLastSelectedNode(selectLowerSiblingNode),
+		ArrowLeft: emitWithLastSelectedNode(selectLeftNode),
+		ArrowRight: emitWithLastSelectedNode(selectRightNode),
+		shift_ArrowLeft: emitWithLastSelectedNode(selectUpstreamNodes),
+		shift_ArrowRight: emitWithLastSelectedNode(selectDownstreamNodes),
+	};
 
-	...(props.readOnly
-		? {}
-		: {
-				ctrl_x: emitWithSelectedNodes((ids) => emit('cut:nodes', ids)),
-				'delete|backspace': emitWithSelectedNodes((ids) => emit('delete:nodes', ids)),
-				ctrl_d: emitWithSelectedNodes((ids) => emit('duplicate:nodes', ids)),
-				d: emitWithSelectedNodes((ids) => emit('update:nodes:enabled', ids)),
-				p: emitWithSelectedNodes((ids) => emit('update:nodes:pin', ids, 'keyboard-shortcut')),
-				f2: emitWithLastSelectedNode((id) => emit('update:node:name', id)),
-				tab: () => emit('create:node', 'tab'),
-				shift_s: () => emit('create:sticky'),
-				ctrl_alt_n: () => emit('create:workflow'),
-				ctrl_enter: () => emit('run:workflow'),
-				ctrl_s: () => emit('save:workflow'),
-			}),
-}));
+	if (props.readOnly) return readOnlyKeymap;
+
+	const fullKeymap = {
+		...readOnlyKeymap,
+		ctrl_x: emitWithSelectedNodes((ids) => emit('cut:nodes', ids)),
+		'delete|backspace': emitWithSelectedNodes((ids) => emit('delete:nodes', ids)),
+		ctrl_d: emitWithSelectedNodes((ids) => emit('duplicate:nodes', ids)),
+		d: emitWithSelectedNodes((ids) => emit('update:nodes:enabled', ids)),
+		p: emitWithSelectedNodes((ids) => emit('update:nodes:pin', ids, 'keyboard-shortcut')),
+		f2: emitWithLastSelectedNode((id) => emit('update:node:name', id)),
+		tab: () => emit('create:node', 'tab'),
+		shift_s: () => emit('create:sticky'),
+		ctrl_alt_n: () => emit('create:workflow'),
+		ctrl_enter: () => emit('run:workflow'),
+		ctrl_s: () => emit('save:workflow'),
+		shift_alt_t: onTidyUp,
+	};
+	return fullKeymap;
+});
 
 useKeybindings(keyMap, { disabled: disableKeyBindings });
 
@@ -589,7 +606,7 @@ function onOpenNodeContextMenu(
 	contextMenu.open(event, { source, nodeId: id });
 }
 
-function onContextMenuAction(action: ContextMenuAction, nodeIds: string[]) {
+async function onContextMenuAction(action: ContextMenuAction, nodeIds: string[]) {
 	switch (action) {
 		case 'add_node':
 			return emit('create:node', 'context_menu');
@@ -617,6 +634,20 @@ function onContextMenuAction(action: ContextMenuAction, nodeIds: string[]) {
 			return emit('update:node:name', nodeIds[0]);
 		case 'change_color':
 			return props.eventBus.emit('nodes:action', { ids: nodeIds, action: 'update:sticky:color' });
+		case 'tidy_up':
+			return await onTidyUp();
+	}
+}
+
+async function onTidyUp() {
+	const applyOnSelection = selectedNodes.value.length > 1;
+	const { nodes } = layout(applyOnSelection ? 'selection' : 'all');
+
+	onUpdateNodesPosition(nodes.map((node) => ({ id: node.id, position: { x: node.x, y: node.y } })));
+
+	if (!applyOnSelection) {
+		await nextTick();
+		await onFitView();
 	}
 }
 
@@ -840,6 +871,7 @@ provide(CanvasKey, {
 			@zoom-in="onZoomIn"
 			@zoom-out="onZoomOut"
 			@reset-zoom="onResetZoom"
+			@tidy-up="onTidyUp"
 		/>
 
 		<Suspense>
diff --git a/packages/frontend/editor-ui/src/components/canvas/elements/buttons/CanvasControlButtons.vue b/packages/frontend/editor-ui/src/components/canvas/elements/buttons/CanvasControlButtons.vue
index 5d9a7a3435..ddc7cce8c8 100644
--- a/packages/frontend/editor-ui/src/components/canvas/elements/buttons/CanvasControlButtons.vue
+++ b/packages/frontend/editor-ui/src/components/canvas/elements/buttons/CanvasControlButtons.vue
@@ -1,6 +1,7 @@
 <script setup lang="ts">
 import { Controls } from '@vue-flow/controls';
 import KeyboardShortcutTooltip from '@/components/KeyboardShortcutTooltip.vue';
+import TidyUpIcon from '@/components/TidyUpIcon.vue';
 import { computed } from 'vue';
 import { useI18n } from '@/composables/useI18n';
 
@@ -18,6 +19,7 @@ const emit = defineEmits<{
 	'zoom-in': [];
 	'zoom-out': [];
 	'zoom-to-fit': [];
+	'tidy-up': [];
 }>();
 
 const i18n = useI18n();
@@ -39,6 +41,10 @@ function onZoomOut() {
 function onZoomToFit() {
 	emit('zoom-to-fit');
 }
+
+function onTidyUp() {
+	emit('tidy-up');
+}
 </script>
 <template>
 	<Controls :show-zoom="false" :show-fit-view="false">
@@ -85,9 +91,37 @@ function onZoomToFit() {
 				@click="onResetZoom"
 			/>
 		</KeyboardShortcutTooltip>
+		<KeyboardShortcutTooltip
+			:label="i18n.baseText('nodeView.tidyUp')"
+			:shortcut="{ shiftKey: true, altKey: true, keys: ['T'] }"
+		>
+			<N8nButton
+				square
+				type="tertiary"
+				size="large"
+				data-test-id="tidy-up-button"
+				:class="$style.iconButton"
+				@click="onTidyUp"
+			>
+				<TidyUpIcon />
+			</N8nButton>
+		</KeyboardShortcutTooltip>
 	</Controls>
 </template>
 
+<style module lang="scss">
+.iconButton {
+	display: flex;
+	align-items: center;
+	justify-content: center;
+
+	svg {
+		width: 16px;
+		height: 16px;
+	}
+}
+</style>
+
 <style lang="scss">
 .vue-flow__controls {
 	display: flex;
diff --git a/packages/frontend/editor-ui/src/components/canvas/elements/buttons/__snapshots__/CanvasControlButtons.test.ts.snap b/packages/frontend/editor-ui/src/components/canvas/elements/buttons/__snapshots__/CanvasControlButtons.test.ts.snap
index d5e55528b1..860476802c 100644
--- a/packages/frontend/editor-ui/src/components/canvas/elements/buttons/__snapshots__/CanvasControlButtons.test.ts.snap
+++ b/packages/frontend/editor-ui/src/components/canvas/elements/buttons/__snapshots__/CanvasControlButtons.test.ts.snap
@@ -20,6 +20,10 @@ exports[`CanvasControlButtons > should render correctly 1`] = `
   </button>
   <!--teleport start-->
   <!--teleport end-->
-  <!--v-if-->
+  <!--v-if--><button class="button button tertiary large square iconButton el-tooltip__trigger el-tooltip__trigger iconButton el-tooltip__trigger el-tooltip__trigger" aria-live="polite" data-test-id="tidy-up-button">
+    <!--v-if--><span><svg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 16 16"><path fill="currentColor" d="M1.6.13c-.18-.17-.47-.18-.62 0L.56.57.14.98c-.2.15-.18.44 0 .62l3.63 3.6c.1.1.1.27 0 .37-.2.2-.53.52-.93.94-.56.57-.12 1.62.22 2.11.05.07.12.1.2.1.05-.01.1-.04.15-.08l5.23-5.22c.1-.1.1-.26-.02-.34-.5-.34-1.55-.78-2.12-.22-.42.4-.75.73-.94.93-.1.1-.27.1-.37 0L1.6.13ZM9.5 3.9c.07-.09.2-.1.3-.04l6.07 3.44c.15.08.18.29.05.4l-1.21 1.22a.26.26 0 0 1-.26.07l-2.18-.64a.26.26 0 0 0-.32.33l.76 2.02c.04.1.01.2-.06.27L7.7 15.92a.26.26 0 0 1-.41-.05L3.83 9.8a.26.26 0 0 1 .04-.3l5.62-5.6Z"></path></svg></span>
+  </button>
+  <!--teleport start-->
+  <!--teleport end-->
 </div>"
 `;
diff --git a/packages/frontend/editor-ui/src/composables/__snapshots__/useCanvasLayout.test.ts.snap b/packages/frontend/editor-ui/src/composables/__snapshots__/useCanvasLayout.test.ts.snap
new file mode 100644
index 0000000000..74736d4375
--- /dev/null
+++ b/packages/frontend/editor-ui/src/composables/__snapshots__/useCanvasLayout.test.ts.snap
@@ -0,0 +1,171 @@
+// Vitest Snapshot v1, https://vitest.dev/guide/snapshot.html
+
+exports[`useCanvasLayout > should layout a basic workflow 1`] = `
+{
+  "boundingBox": {
+    "height": 100,
+    "width": 540,
+    "x": 0,
+    "y": 0,
+  },
+  "nodes": [
+    {
+      "id": "node1",
+      "x": 100,
+      "y": 100,
+    },
+    {
+      "id": "node2",
+      "x": 320,
+      "y": 100,
+    },
+    {
+      "id": "node3",
+      "x": 540,
+      "y": 100,
+    },
+  ],
+}
+`;
+
+exports[`useCanvasLayout > should layout a basic workflow with selected nodes 1`] = `
+{
+  "boundingBox": {
+    "height": 100,
+    "width": 540,
+    "x": 0,
+    "y": 0,
+  },
+  "nodes": [
+    {
+      "id": "node1",
+      "x": 100,
+      "y": 100,
+    },
+    {
+      "id": "node2",
+      "x": 320,
+      "y": 100,
+    },
+    {
+      "id": "node3",
+      "x": 540,
+      "y": 100,
+    },
+  ],
+}
+`;
+
+exports[`useCanvasLayout > should layout a workflow with AI nodes 1`] = `
+{
+  "boundingBox": {
+    "height": 540,
+    "width": 820,
+    "x": 0,
+    "y": 220,
+  },
+  "nodes": [
+    {
+      "id": "node1",
+      "x": 100,
+      "y": 100,
+    },
+    {
+      "id": "aiTool1",
+      "x": 320,
+      "y": 320,
+    },
+    {
+      "id": "aiTool2",
+      "x": 460,
+      "y": 320,
+    },
+    {
+      "id": "aiTool3",
+      "x": 600,
+      "y": 540,
+    },
+    {
+      "id": "aiAgent",
+      "x": 460,
+      "y": 100,
+    },
+    {
+      "id": "configurableAiTool",
+      "x": 600,
+      "y": 320,
+    },
+    {
+      "id": "node2",
+      "x": 820,
+      "y": 100,
+    },
+  ],
+}
+`;
+
+exports[`useCanvasLayout > should layout a workflow with sticky notes 1`] = `
+{
+  "boundingBox": {
+    "height": 100,
+    "width": 760,
+    "x": 0,
+    "y": 0,
+  },
+  "nodes": [
+    {
+      "id": "node1",
+      "x": 0,
+      "y": 0,
+    },
+    {
+      "id": "node2",
+      "x": 220,
+      "y": 0,
+    },
+    {
+      "id": "node3",
+      "x": 440,
+      "y": 0,
+    },
+    {
+      "id": "node4",
+      "x": 660,
+      "y": 0,
+    },
+    {
+      "id": "sticky",
+      "x": 130,
+      "y": -240,
+    },
+  ],
+}
+`;
+
+exports[`useCanvasLayout > should not reorder nodes vertically as it affects execution order 1`] = `
+{
+  "boundingBox": {
+    "height": 300,
+    "width": 320,
+    "x": 0,
+    "y": 0,
+  },
+  "nodes": [
+    {
+      "id": "node1",
+      "x": 0,
+      "y": -100,
+    },
+    {
+      "id": "node3",
+      "x": 220,
+      "y": -200,
+    },
+    {
+      "id": "node2",
+      "x": 220,
+      "y": 0,
+    },
+  ],
+}
+`;
diff --git a/packages/frontend/editor-ui/src/composables/__snapshots__/useContextMenu.test.ts.snap b/packages/frontend/editor-ui/src/composables/__snapshots__/useContextMenu.test.ts.snap
index ec9c211eac..1a9cb64c2b 100644
--- a/packages/frontend/editor-ui/src/composables/__snapshots__/useContextMenu.test.ts.snap
+++ b/packages/frontend/editor-ui/src/composables/__snapshots__/useContextMenu.test.ts.snap
@@ -67,6 +67,18 @@ exports[`useContextMenu > Read-only mode > should return the correct actions whe
       "metaKey": true,
     },
   },
+  {
+    "divided": true,
+    "id": "tidy_up",
+    "label": "Tidy up workflow",
+    "shortcut": {
+      "altKey": true,
+      "keys": [
+        "T",
+      ],
+      "shiftKey": true,
+    },
+  },
   {
     "disabled": false,
     "divided": true,
@@ -136,6 +148,18 @@ exports[`useContextMenu > Read-only mode > should return the correct actions whe
       "metaKey": true,
     },
   },
+  {
+    "divided": true,
+    "id": "tidy_up",
+    "label": "Tidy up workflow",
+    "shortcut": {
+      "altKey": true,
+      "keys": [
+        "T",
+      ],
+      "shiftKey": true,
+    },
+  },
   {
     "disabled": false,
     "divided": true,
@@ -234,6 +258,18 @@ exports[`useContextMenu > should return the correct actions opening the menu fro
       "metaKey": true,
     },
   },
+  {
+    "divided": true,
+    "id": "tidy_up",
+    "label": "Tidy up workflow",
+    "shortcut": {
+      "altKey": true,
+      "keys": [
+        "T",
+      ],
+      "shiftKey": true,
+    },
+  },
   {
     "disabled": false,
     "divided": true,
@@ -332,6 +368,18 @@ exports[`useContextMenu > should return the correct actions when right clicking
       "metaKey": true,
     },
   },
+  {
+    "divided": true,
+    "id": "tidy_up",
+    "label": "Tidy up workflow",
+    "shortcut": {
+      "altKey": true,
+      "keys": [
+        "T",
+      ],
+      "shiftKey": true,
+    },
+  },
   {
     "disabled": false,
     "divided": true,
@@ -401,6 +449,18 @@ exports[`useContextMenu > should return the correct actions when right clicking
       "metaKey": true,
     },
   },
+  {
+    "divided": true,
+    "id": "tidy_up",
+    "label": "Tidy up workflow",
+    "shortcut": {
+      "altKey": true,
+      "keys": [
+        "T",
+      ],
+      "shiftKey": true,
+    },
+  },
   {
     "disabled": false,
     "divided": true,
@@ -475,6 +535,18 @@ exports[`useContextMenu > should support opening and closing (default = right cl
       "metaKey": true,
     },
   },
+  {
+    "divided": true,
+    "id": "tidy_up",
+    "label": "Tidy up selection",
+    "shortcut": {
+      "altKey": true,
+      "keys": [
+        "T",
+      ],
+      "shiftKey": true,
+    },
+  },
   {
     "disabled": false,
     "divided": true,
diff --git a/packages/frontend/editor-ui/src/composables/useCanvasLayout.test.ts b/packages/frontend/editor-ui/src/composables/useCanvasLayout.test.ts
new file mode 100644
index 0000000000..9a6132e06f
--- /dev/null
+++ b/packages/frontend/editor-ui/src/composables/useCanvasLayout.test.ts
@@ -0,0 +1,170 @@
+import { useVueFlow, type GraphNode, type VueFlowStore } from '@vue-flow/core';
+import { ref } from 'vue';
+import { createCanvasGraphEdge, createCanvasGraphNode } from '../__tests__/data';
+import { CanvasNodeRenderType, type CanvasNodeData } from '../types';
+import { useCanvasLayout, type LayoutResult } from './useCanvasLayout';
+import { STICKY_NODE_TYPE } from '../constants';
+import { GRID_SIZE } from '../utils/nodeViewUtils';
+
+vi.mock('@vue-flow/core');
+
+function matchesGrid(result: LayoutResult) {
+	return result.nodes.every((node) => node.x % GRID_SIZE === 0 && node.y % GRID_SIZE === 0);
+}
+
+describe('useCanvasLayout', () => {
+	function createTestSetup(
+		nodes: Array<GraphNode<CanvasNodeData>>,
+		connections: Array<[string, string]>,
+		selectedNodeIds?: string[],
+	) {
+		const nodesById = Object.fromEntries(nodes.map((node) => [node.id, node]));
+		const edges = connections.map(([sourceId, targetId]) =>
+			createCanvasGraphEdge(nodesById[sourceId], nodesById[targetId]),
+		);
+		const edgesById = Object.fromEntries(edges.map((edge) => [edge.id, edge]));
+
+		const selectedNodes = selectedNodeIds?.map((id) => nodesById[id]) ?? nodes;
+
+		const vueFlowStoreMock = {
+			nodes: ref(nodes),
+			edges: ref(edges),
+			getSelectedNodes: ref(selectedNodes),
+			findNode: (nodeId: string) => nodesById[nodeId],
+			findEdge: (edgeId: string) => edgesById[edgeId],
+		} as unknown as VueFlowStore;
+
+		vi.mocked(useVueFlow).mockReturnValue(vueFlowStoreMock);
+
+		const { layout } = useCanvasLayout();
+
+		return { layout };
+	}
+
+	test('should layout a basic workflow', () => {
+		const nodes = [
+			createCanvasGraphNode({ id: 'node1' }),
+			createCanvasGraphNode({ id: 'node2' }),
+			createCanvasGraphNode({ id: 'node3' }),
+		];
+
+		const connections: Array<[string, string]> = [
+			['node1', 'node2'],
+			['node2', 'node3'],
+		];
+
+		const { layout } = createTestSetup(nodes, connections);
+		const result = layout('all');
+		expect(result).toMatchSnapshot();
+		expect(matchesGrid(result)).toBe(true);
+	});
+
+	test('should layout a basic workflow with selected nodes', () => {
+		const nodes = [
+			createCanvasGraphNode({ id: 'node1' }),
+			createCanvasGraphNode({ id: 'node2' }),
+			createCanvasGraphNode({ id: 'node3' }),
+			createCanvasGraphNode({ id: 'node4' }),
+		];
+
+		const connections: Array<[string, string]> = [
+			['node1', 'node2'],
+			['node2', 'node3'],
+			['node3', 'node4'],
+		];
+
+		const { layout } = createTestSetup(nodes, connections, ['node1', 'node2', 'node3']);
+		const result = layout('selection');
+		expect(result).toMatchSnapshot();
+		expect(matchesGrid(result)).toBe(true);
+	});
+
+	test('should layout a workflow with AI nodes', () => {
+		const nodes = [
+			createCanvasGraphNode({ id: 'node1' }),
+			createCanvasGraphNode({
+				id: 'aiAgent',
+				data: { render: { type: CanvasNodeRenderType.Default, options: { configurable: true } } },
+			}),
+			createCanvasGraphNode({
+				id: 'aiTool1',
+				data: { render: { type: CanvasNodeRenderType.Default, options: { configuration: true } } },
+			}),
+			createCanvasGraphNode({
+				id: 'aiTool2',
+				data: { render: { type: CanvasNodeRenderType.Default, options: { configuration: true } } },
+			}),
+			createCanvasGraphNode({
+				id: 'configurableAiTool',
+				data: {
+					render: {
+						type: CanvasNodeRenderType.Default,
+						options: { configurable: true, configuration: true },
+					},
+				},
+			}),
+			createCanvasGraphNode({
+				id: 'aiTool3',
+				data: { render: { type: CanvasNodeRenderType.Default, options: { configuration: true } } },
+			}),
+			createCanvasGraphNode({ id: 'node2' }),
+		];
+
+		const connections: Array<[string, string]> = [
+			['node1', 'aiAgent'],
+			['aiTool1', 'aiAgent'],
+			['aiTool2', 'aiAgent'],
+			['configurableAiTool', 'aiAgent'],
+			['aiTool3', 'configurableAiTool'],
+			['aiAgent', 'node2'],
+		];
+
+		const { layout } = createTestSetup(nodes, connections);
+		const result = layout('all');
+		expect(result).toMatchSnapshot();
+		expect(matchesGrid(result)).toBe(true);
+	});
+
+	test('should layout a workflow with sticky notes', () => {
+		const nodes = [
+			createCanvasGraphNode({ id: 'node1', position: { x: 0, y: 0 } }),
+			createCanvasGraphNode({ id: 'node2', position: { x: 500, y: 0 } }),
+			createCanvasGraphNode({ id: 'node3', position: { x: 700, y: 0 } }),
+			createCanvasGraphNode({ id: 'node4', position: { x: 1000, y: 0 } }),
+			createCanvasGraphNode({
+				id: 'sticky',
+				data: { type: STICKY_NODE_TYPE },
+				dimensions: { width: 500, height: 400 },
+				position: { x: 400, y: -100 },
+			}),
+		];
+
+		const connections: Array<[string, string]> = [
+			['node1', 'node2'],
+			['node2', 'node3'],
+			['node3', 'node4'],
+		];
+
+		const { layout } = createTestSetup(nodes, connections);
+		const result = layout('all');
+		expect(result).toMatchSnapshot();
+	});
+
+	test('should not reorder nodes vertically as it affects execution order', () => {
+		const nodes = [
+			createCanvasGraphNode({ id: 'node1', position: { x: 0, y: 0 } }),
+			createCanvasGraphNode({ id: 'node2', position: { x: 400, y: 200 } }),
+			createCanvasGraphNode({ id: 'node3', position: { x: 400, y: -200 } }),
+		];
+
+		const connections: Array<[string, string]> = [
+			['node1', 'node3'],
+			['node1', 'node2'],
+		];
+
+		const { layout } = createTestSetup(nodes, connections);
+		const result = layout('all');
+		expect(result).toMatchSnapshot();
+		expect(matchesGrid(result)).toBe(true);
+	});
+});
diff --git a/packages/frontend/editor-ui/src/composables/useCanvasLayout.ts b/packages/frontend/editor-ui/src/composables/useCanvasLayout.ts
new file mode 100644
index 0000000000..1ebb662b89
--- /dev/null
+++ b/packages/frontend/editor-ui/src/composables/useCanvasLayout.ts
@@ -0,0 +1,516 @@
+import dagre from '@dagrejs/dagre';
+
+import { useVueFlow, type GraphEdge, type GraphNode, type XYPosition } from '@vue-flow/core';
+import { STICKY_NODE_TYPE } from '../constants';
+import {
+	CanvasNodeRenderType,
+	type BoundingBox,
+	type CanvasConnection,
+	type CanvasNodeData,
+} from '../types';
+import { isPresent } from '../utils/typesUtils';
+import { GRID_SIZE, NODE_SIZE } from '../utils/nodeViewUtils';
+
+export type CanvasLayoutOptions = { id?: string };
+export type CanvasLayoutTarget = 'selection' | 'all';
+export type CanvasLayoutTargetData = {
+	nodes: Array<GraphNode<CanvasNodeData>>;
+	edges: CanvasConnection[];
+};
+
+export type NodeLayoutResult = {
+	id: string;
+	x: number;
+	y: number;
+	width?: number;
+	height?: number;
+};
+export type LayoutResult = { boundingBox: BoundingBox; nodes: NodeLayoutResult[] };
+
+export type CanvasNodeDictionary = Record<string, GraphNode<CanvasNodeData>>;
+
+const NODE_X_SPACING = GRID_SIZE * 6;
+const NODE_Y_SPACING = GRID_SIZE * 5;
+const SUBGRAPH_SPACING = GRID_SIZE * 8;
+const AI_X_SPACING = GRID_SIZE * 2;
+const AI_Y_SPACING = GRID_SIZE * 6;
+const STICKY_BOTTOM_PADDING = GRID_SIZE * 3;
+
+export function useCanvasLayout({ id: canvasId }: CanvasLayoutOptions = {}) {
+	const {
+		findNode,
+		findEdge,
+		getSelectedNodes,
+		edges: allEdges,
+		nodes: allNodes,
+	} = useVueFlow({ id: canvasId });
+
+	function getTargetData(target: CanvasLayoutTarget): CanvasLayoutTargetData {
+		if (target === 'selection') {
+			return { nodes: getSelectedNodes.value, edges: allEdges.value };
+		}
+		return { nodes: allNodes.value, edges: allEdges.value };
+	}
+
+	function sortByPosition(posA: XYPosition, posB: XYPosition): number {
+		const yDiff = posA.y - posB.y;
+		return yDiff === 0 ? posA.x - posB.x : yDiff;
+	}
+
+	function sortNodesByPosition(nodeA: GraphNode, nodeB: GraphNode): number {
+		const hasEdgesA = allEdges.value.some((edge) => edge.target === nodeA.id);
+		const hasEdgesB = allEdges.value.some((edge) => edge.target === nodeB.id);
+
+		if (!hasEdgesA && hasEdgesB) return -1;
+		if (hasEdgesA && !hasEdgesB) return 1;
+		return sortByPosition(nodeA.position, nodeB.position);
+	}
+
+	function sortEdgesByPosition(edgeA: GraphEdge, edgeB: GraphEdge): number {
+		return sortByPosition(positionFromEdge(edgeA), positionFromEdge(edgeB));
+	}
+
+	function positionFromEdge(edge: GraphEdge): XYPosition {
+		return { x: edge.targetX, y: edge.targetY };
+	}
+
+	function createDagreGraph({ nodes, edges }: CanvasLayoutTargetData) {
+		const graph = new dagre.graphlib.Graph();
+		graph.setDefaultEdgeLabel(() => ({}));
+
+		const graphNodes = nodes
+			.map((node) => findNode<CanvasNodeData>(node.id))
+			.filter(isPresent)
+			.sort(sortNodesByPosition);
+
+		const nodeIdSet = new Set(nodes.map((node) => node.id));
+
+		graphNodes.forEach(({ id: nodeId, position: { x, y }, dimensions: { width, height } }) => {
+			graph.setNode(nodeId, { width, height, x, y });
+		});
+
+		edges
+			.map((node) => findEdge<CanvasNodeData>(node.id))
+			.filter(isPresent)
+			.filter((edge) => nodeIdSet.has(edge.source) && nodeIdSet.has(edge.target))
+			.sort(sortEdgesByPosition)
+			.forEach((edge) => graph.setEdge(edge.source, edge.target));
+
+		return graph;
+	}
+
+	function createDagreSubGraph({
+		nodeIds,
+		parent,
+	}: { nodeIds: string[]; parent: dagre.graphlib.Graph }) {
+		const subGraph = new dagre.graphlib.Graph();
+		subGraph.setGraph({
+			rankdir: 'LR',
+			edgesep: NODE_Y_SPACING,
+			nodesep: NODE_Y_SPACING,
+			ranksep: NODE_X_SPACING,
+		});
+		subGraph.setDefaultEdgeLabel(() => ({}));
+		const nodeIdSet = new Set(nodeIds);
+
+		parent
+			.nodes()
+			.filter((nodeId) => nodeIdSet.has(nodeId))
+			.forEach((nodeId) => {
+				subGraph.setNode(nodeId, parent.node(nodeId));
+			});
+
+		parent
+			.edges()
+			.filter((edge) => nodeIdSet.has(edge.v) && nodeIdSet.has(edge.w))
+			.forEach((edge) => subGraph.setEdge(edge.v, edge.w, parent.edge(edge)));
+
+		return subGraph;
+	}
+
+	function createDagreVerticalGraph({ nodes }: { nodes: Array<{ id: string; box: BoundingBox }> }) {
+		const subGraph = new dagre.graphlib.Graph();
+		subGraph.setGraph({
+			rankdir: 'TB',
+			align: 'UL',
+			edgesep: SUBGRAPH_SPACING,
+			nodesep: SUBGRAPH_SPACING,
+			ranksep: SUBGRAPH_SPACING,
+		});
+		subGraph.setDefaultEdgeLabel(() => ({}));
+
+		nodes.forEach(({ id, box: { x, y, width, height } }) =>
+			subGraph.setNode(id, { x, y, width, height }),
+		);
+
+		nodes.forEach((node, index) => {
+			if (!nodes[index + 1]) return;
+			subGraph.setEdge(node.id, nodes[index + 1].id);
+		});
+
+		return subGraph;
+	}
+
+	function createAiSubGraph({
+		parent,
+		nodeIds,
+	}: { parent: dagre.graphlib.Graph; nodeIds: string[] }) {
+		const subGraph = new dagre.graphlib.Graph();
+		subGraph.setGraph({
+			rankdir: 'TB',
+			edgesep: AI_X_SPACING,
+			nodesep: AI_X_SPACING,
+			ranksep: AI_Y_SPACING,
+		});
+		subGraph.setDefaultEdgeLabel(() => ({}));
+		const nodeIdSet = new Set(nodeIds);
+
+		parent
+			.nodes()
+			.filter((nodeId) => nodeIdSet.has(nodeId))
+			.forEach((nodeId) => {
+				subGraph.setNode(nodeId, parent.node(nodeId));
+			});
+
+		parent
+			.edges()
+			.filter((edge) => nodeIdSet.has(edge.v) && nodeIdSet.has(edge.w))
+			.forEach((edge) => subGraph.setEdge(edge.w, edge.v));
+
+		return subGraph;
+	}
+
+	// For a list of bounding boxes, return the bounding box that contains them all
+	function compositeBoundingBox(boxes: BoundingBox[]): BoundingBox {
+		const { minX, minY, maxX, maxY } = boxes.reduce(
+			(bbox, node) => {
+				const { x, y, width, height } = node;
+				return {
+					minX: Math.min(bbox.minX, x),
+					maxX: Math.max(bbox.maxX, x + width),
+					minY: Math.min(bbox.minY, y),
+					maxY: Math.max(bbox.maxY, y + height),
+				};
+			},
+			{ minX: Infinity, minY: Infinity, maxX: -Infinity, maxY: -Infinity },
+		);
+
+		return {
+			x: minX,
+			y: minY,
+			width: maxX - minX,
+			height: maxY - minY,
+		};
+	}
+
+	function boundingBoxFromCanvasNode(node: GraphNode<CanvasNodeData>): BoundingBox {
+		return {
+			x: node.position.x,
+			y: node.position.y,
+			width: node.dimensions.width,
+			height: node.dimensions.height,
+		};
+	}
+
+	function boundingBoxFromDagreNode(node: dagre.Node): BoundingBox {
+		return {
+			x: node.x - node.width / 2,
+			y: node.y - node.height / 2,
+			width: node.width,
+			height: node.height,
+		};
+	}
+
+	function boundingBoxFromGraph(graph: dagre.graphlib.Graph): BoundingBox {
+		return compositeBoundingBox(
+			graph.nodes().map((nodeId) => boundingBoxFromDagreNode(graph.node(nodeId))),
+		);
+	}
+
+	function boundingBoxFromCanvasNodes(nodes: Array<GraphNode<CanvasNodeData>>): BoundingBox {
+		return compositeBoundingBox(nodes.map(boundingBoxFromCanvasNode));
+	}
+
+	// Is the `child` bounding box completely contained in the `parent` bounding box
+	function isCoveredBy(parent: BoundingBox, child: BoundingBox) {
+		const childRight = child.x + child.width;
+		const childBottom = child.y + child.height;
+		const parentRight = parent.x + parent.width;
+		const parentBottom = parent.y + parent.height;
+
+		return (
+			child.x >= parent.x &&
+			child.y >= parent.y &&
+			childRight <= parentRight &&
+			childBottom <= parentBottom
+		);
+	}
+
+	function centerHorizontally(container: BoundingBox, target: BoundingBox) {
+		const containerCenter = container.x + container.width / 2;
+		const newX = containerCenter - target.width / 2;
+		return newX;
+	}
+
+	function intersects(container: BoundingBox, target: BoundingBox, padding = 0): boolean {
+		// Add padding to target box dimensions
+		const targetWithPadding = {
+			x: target.x - padding,
+			y: target.y - padding,
+			width: target.width + padding * 2,
+			height: target.height + padding * 2,
+		};
+
+		const noIntersection =
+			targetWithPadding.x + targetWithPadding.width < container.x ||
+			targetWithPadding.x > container.x + container.width ||
+			targetWithPadding.y + targetWithPadding.height < container.y ||
+			targetWithPadding.y > container.y + container.height;
+
+		return !noIntersection;
+	}
+
+	function isAiParentNode(node: CanvasNodeData) {
+		return (
+			node.render.type === CanvasNodeRenderType.Default &&
+			node.render.options.configurable &&
+			!node.render.options.configuration
+		);
+	}
+
+	function isAiConfigNode(node: CanvasNodeData) {
+		return node.render.type === CanvasNodeRenderType.Default && node.render.options.configuration;
+	}
+
+	function getAllConnectedAiConfigNodes({
+		graph,
+		root,
+		nodeById,
+	}: {
+		graph: dagre.graphlib.Graph;
+		root: CanvasNodeData;
+		nodeById: CanvasNodeDictionary;
+	}): string[] {
+		return (graph.predecessors(root.id) as unknown as string[])
+			.map((successor) => nodeById[successor])
+			.filter((node) => isAiConfigNode(node.data))
+			.flatMap((node) => [
+				node.id,
+				...getAllConnectedAiConfigNodes({ graph, root: node.data, nodeById }),
+			]);
+	}
+
+	function layout(target: CanvasLayoutTarget): LayoutResult {
+		const { nodes, edges } = getTargetData(target);
+
+		const nonStickyNodes = nodes
+			.filter((node) => node.data.type !== STICKY_NODE_TYPE)
+			.map((node) => findNode(node.id))
+			.filter(isPresent);
+		const boundingBoxBefore = boundingBoxFromCanvasNodes(nonStickyNodes);
+
+		const parentGraph = createDagreGraph({ nodes: nonStickyNodes, edges });
+		const nodeById = nonStickyNodes.reduce((acc, node) => {
+			acc[node.id] = node;
+			return acc;
+		}, {} as CanvasNodeDictionary);
+
+		// Divide workflow in to subgraphs
+		// A subgraph contains a group of connected nodes that is not connected to any node outside of this group
+		const subgraphs = dagre.graphlib.alg.components(parentGraph).map((nodeIds) => {
+			const subgraph = createDagreSubGraph({ nodeIds, parent: parentGraph });
+			const aiParentNodes = subgraph
+				.nodes()
+				.map((nodeId) => nodeById[nodeId].data)
+				.filter(isAiParentNode);
+
+			// Create a subgraph for each AI (configurable) node and apply a top-bottom layout
+			// Then add the bounding box of this layout back into the parent graph before doing layout
+			const aiGraphs = aiParentNodes.map((aiParentNode) => {
+				const configNodeIds = getAllConnectedAiConfigNodes({
+					graph: subgraph,
+					nodeById,
+					root: aiParentNode,
+				});
+				const allAiNodeIds = configNodeIds.concat(aiParentNode.id);
+				const aiGraph = createAiSubGraph({
+					parent: subgraph,
+					nodeIds: allAiNodeIds,
+				});
+				configNodeIds.forEach((nodeId) => subgraph.removeNode(nodeId));
+				const rootEdges = subgraph
+					.edges()
+					.filter((edge) => edge.v === aiParentNode.id || edge.w === aiParentNode.id);
+
+				dagre.layout(aiGraph, { disableOptimalOrderHeuristic: true });
+				const aiBoundingBox = boundingBoxFromGraph(aiGraph);
+				subgraph.setNode(aiParentNode.id, {
+					width: aiBoundingBox.width,
+					height: aiBoundingBox.height,
+				});
+				rootEdges.forEach((edge) => subgraph.setEdge(edge));
+
+				return { graph: aiGraph, boundingBox: aiBoundingBox, aiParentNode };
+			});
+
+			dagre.layout(subgraph, { disableOptimalOrderHeuristic: true });
+
+			return { graph: subgraph, aiGraphs, boundingBox: boundingBoxFromGraph(subgraph) };
+		});
+
+		const compositeGraph = createDagreVerticalGraph({
+			nodes: subgraphs.map(({ boundingBox }, index) => ({
+				box: boundingBox,
+				id: index.toString(),
+			})),
+		});
+
+		dagre.layout(compositeGraph, { disableOptimalOrderHeuristic: true });
+
+		const boundingBoxByNodeId = subgraphs
+			.flatMap(({ graph, aiGraphs }, index) => {
+				const subgraphPosition = compositeGraph.node(index.toString());
+
+				const aiParentNodes = new Set(aiGraphs.map(({ aiParentNode }) => aiParentNode.id));
+				const offset = {
+					x: 0,
+					y: subgraphPosition.y - subgraphPosition.height / 2,
+				};
+
+				return graph.nodes().flatMap((nodeId) => {
+					const { x, y, width, height } = graph.node(nodeId);
+					const positionedNode = {
+						id: nodeId,
+						boundingBox: {
+							x: x + offset.x - width / 2,
+							y: y + offset.y - height / 2,
+							width,
+							height,
+						},
+					};
+
+					if (aiParentNodes.has(nodeId)) {
+						const aiGraph = aiGraphs.find(({ aiParentNode }) => aiParentNode.id === nodeId);
+
+						if (!aiGraph) return [];
+
+						const aiParentNodeBox = positionedNode.boundingBox;
+
+						const parentOffset = {
+							x: aiParentNodeBox.x,
+							y: aiParentNodeBox.y,
+						};
+
+						return aiGraph.graph.nodes().map((aiNodeId) => {
+							const aiNode = aiGraph.graph.node(aiNodeId);
+							const aiBoundingBox = {
+								x: aiNode.x + parentOffset.x - aiNode.width / 2,
+								y: aiNode.y + parentOffset.y - aiNode.height / 2,
+								width: aiNode.width,
+								height: aiNode.height,
+							};
+
+							return {
+								id: aiNodeId,
+								boundingBox: aiBoundingBox,
+							};
+						});
+					}
+
+					return positionedNode;
+				});
+			})
+			.reduce(
+				(acc, node) => {
+					acc[node.id] = node.boundingBox;
+					return acc;
+				},
+				{} as Record<string, BoundingBox>,
+			);
+
+		// Post process AI node vertical position
+		// The bounding box of the AI node sublayout is vertically centered with the other nodes, but we want it to be top-aligned when possible
+		// We need to be careful to only do this when it would not overlap with other nodes
+		subgraphs
+			.flatMap(({ aiGraphs }) => aiGraphs)
+			.forEach(({ graph }) => {
+				const aiNodes = graph.nodes();
+				const aiGraphBoundingBox = compositeBoundingBox(
+					aiNodes.map((nodeId) => boundingBoxByNodeId[nodeId]).filter(isPresent),
+				);
+				const aiNodeVerticalCorrection = aiGraphBoundingBox.height / 2 - NODE_SIZE / 2;
+				aiGraphBoundingBox.y += aiNodeVerticalCorrection;
+
+				const hasConflictingNodes = Object.entries(boundingBoxByNodeId)
+					.filter(([id]) => !graph.hasNode(id))
+					.some(([, nodeBoundingBox]) =>
+						intersects(aiGraphBoundingBox, nodeBoundingBox, NODE_Y_SPACING),
+					);
+
+				if (!hasConflictingNodes) {
+					for (const aiNode of aiNodes) {
+						boundingBoxByNodeId[aiNode].y += aiNodeVerticalCorrection;
+					}
+				}
+			});
+
+		const positionedNodes = Object.entries(boundingBoxByNodeId).map(([id, boundingBox]) => ({
+			id,
+			boundingBox,
+		}));
+		const boundingBoxAfter = compositeBoundingBox(positionedNodes.map((node) => node.boundingBox));
+
+		const anchor = {
+			x: boundingBoxAfter.x - boundingBoxBefore.x,
+			y: boundingBoxAfter.y - boundingBoxBefore.y,
+		};
+
+		const stickies = nodes
+			.filter((node) => node.data.type === STICKY_NODE_TYPE)
+			.map((node) => findNode(node.id))
+			.filter(isPresent);
+
+		const positionedStickies = stickies
+			.map((sticky) => {
+				const stickyBox = boundingBoxFromCanvasNode(sticky);
+				const coveredNodes = nonStickyNodes.filter((node) =>
+					isCoveredBy(boundingBoxFromCanvasNode(sticky), boundingBoxFromCanvasNode(node)),
+				);
+
+				if (coveredNodes.length === 0) return null;
+
+				const coveredNodesBoxAfter = compositeBoundingBox(
+					positionedNodes
+						.filter((node) => coveredNodes.some((covered) => covered.id === node.id))
+						.map(({ boundingBox }) => boundingBox),
+				);
+				return {
+					id: sticky.id,
+					boundingBox: {
+						x: centerHorizontally(coveredNodesBoxAfter, stickyBox),
+						y:
+							coveredNodesBoxAfter.y +
+							coveredNodesBoxAfter.height -
+							stickyBox.height +
+							STICKY_BOTTOM_PADDING,
+						height: stickyBox.height,
+						width: stickyBox.width,
+					},
+				};
+			})
+			.filter(isPresent);
+
+		return {
+			boundingBox: boundingBoxAfter,
+			nodes: positionedNodes.concat(positionedStickies).map(({ id, boundingBox }) => {
+				return {
+					id,
+					x: boundingBox.x - anchor.x,
+					y: boundingBox.y - anchor.y,
+				};
+			}),
+		};
+	}
+
+	return { layout };
+}
diff --git a/packages/frontend/editor-ui/src/composables/useContextMenu.ts b/packages/frontend/editor-ui/src/composables/useContextMenu.ts
index 21322cc910..208166b831 100644
--- a/packages/frontend/editor-ui/src/composables/useContextMenu.ts
+++ b/packages/frontend/editor-ui/src/composables/useContextMenu.ts
@@ -31,7 +31,8 @@ export type ContextMenuAction =
 	| 'deselect_all'
 	| 'add_node'
 	| 'add_sticky'
-	| 'change_color';
+	| 'change_color'
+	| 'tidy_up';
 
 const position = ref<XYPosition>([0, 0]);
 const isOpen = ref(false);
@@ -120,7 +121,7 @@ export const useContextMenu = (onAction: ContextMenuActionCallback = () => {}) =
 			},
 		};
 
-		const selectionActions = [
+		const selectionActions: ActionDropdownItem[] = [
 			{
 				id: 'select_all',
 				divided: true,
@@ -135,6 +136,17 @@ export const useContextMenu = (onAction: ContextMenuActionCallback = () => {}) =
 			},
 		];
 
+		const layoutActions: ActionDropdownItem[] = [
+			{
+				id: 'tidy_up',
+				divided: true,
+				label: i18n.baseText(
+					nodes.length < 2 ? 'contextMenu.tidyUpWorkflow' : 'contextMenu.tidyUpSelection',
+				),
+				shortcut: { shiftKey: true, altKey: true, keys: ['T'] },
+			},
+		];
+
 		if (nodes.length === 0) {
 			actions.value = [
 				{
@@ -149,6 +161,7 @@ export const useContextMenu = (onAction: ContextMenuActionCallback = () => {}) =
 					label: i18n.baseText('contextMenu.addSticky'),
 					disabled: isReadOnly.value,
 				},
+				...layoutActions,
 				...selectionActions,
 			];
 		} else {
@@ -180,6 +193,7 @@ export const useContextMenu = (onAction: ContextMenuActionCallback = () => {}) =
 					shortcut: { metaKey: true, keys: ['D'] },
 					disabled: isReadOnly.value || !nodes.every(canDuplicateNode),
 				},
+				...layoutActions,
 				...selectionActions,
 				{
 					id: 'delete',
diff --git a/packages/frontend/editor-ui/src/plugins/i18n/locales/en.json b/packages/frontend/editor-ui/src/plugins/i18n/locales/en.json
index 6d67060348..eb7dda1790 100644
--- a/packages/frontend/editor-ui/src/plugins/i18n/locales/en.json
+++ b/packages/frontend/editor-ui/src/plugins/i18n/locales/en.json
@@ -1332,6 +1332,7 @@
 	"nodeView.redirecting": "Redirecting",
 	"nodeView.refresh": "Refresh",
 	"nodeView.resetZoom": "Reset Zoom",
+	"nodeView.tidyUp": "Tidy Up",
 	"nodeView.runButtonText.executeWorkflow": "Test workflow",
 	"nodeView.runButtonText.executingWorkflow": "Executing workflow",
 	"nodeView.runButtonText.waitingForTriggerEvent": "Waiting for trigger event",
@@ -1381,6 +1382,8 @@
 	"contextMenu.sticky": "sticky note | sticky notes",
 	"contextMenu.selectAll": "Select all",
 	"contextMenu.deselectAll": "Clear selection",
+	"contextMenu.tidyUpWorkflow": "Tidy up workflow",
+	"contextMenu.tidyUpSelection": "Tidy up selection",
 	"contextMenu.duplicate": "Duplicate | Duplicate {count} {subject}",
 	"contextMenu.open": "Open...",
 	"contextMenu.test": "Test step",
diff --git a/pnpm-lock.yaml b/pnpm-lock.yaml
index 7820190cbd..1ba06540d3 100644
--- a/pnpm-lock.yaml
+++ b/pnpm-lock.yaml
@@ -1576,6 +1576,9 @@ importers:
       '@codemirror/view':
         specifier: ^6.26.3
         version: 6.26.3
+      '@dagrejs/dagre':
+        specifier: ^1.1.4
+        version: 1.1.4
       '@fontsource/open-sans':
         specifier: ^4.5.0
         version: 4.5.12
@@ -3343,6 +3346,13 @@ packages:
   '@dabh/diagnostics@2.0.3':
     resolution: {integrity: sha512-hrlQOIi7hAfzsMqlGSFyVucrx38O+j6wiGOf//H2ecvIEqYN4ADBSS2iLMh5UFyDunCNniUIPk/q3riFv45xRA==}
 
+  '@dagrejs/dagre@1.1.4':
+    resolution: {integrity: sha512-QUTc54Cg/wvmlEUxB+uvoPVKFazM1H18kVHBQNmK2NbrDR5ihOCR6CXLnDSZzMcSQKJtabPUWridBOlJM3WkDg==}
+
+  '@dagrejs/graphlib@2.2.4':
+    resolution: {integrity: sha512-mepCf/e9+SKYy1d02/UkvSy6+6MoyXhVxP8lLDfA7BPE1X1d4dR0sZznmbM8/XVJ1GPM+Svnx7Xj6ZweByWUkw==}
+    engines: {node: '>17.0.0'}
+
   '@element-plus/icons-vue@2.3.1':
     resolution: {integrity: sha512-XxVUZv48RZAd87ucGS48jPf6pKu0yV5UCg9f4FFwtrYxXOwWuVJo6wOvSLKEoMQKjv8GsX/mhP6UsC1lRwbUWg==}
     peerDependencies:
@@ -15752,6 +15762,12 @@ snapshots:
       enabled: 2.0.0
       kuler: 2.0.0
 
+  '@dagrejs/dagre@1.1.4':
+    dependencies:
+      '@dagrejs/graphlib': 2.2.4
+
+  '@dagrejs/graphlib@2.2.4': {}
+
   '@element-plus/icons-vue@2.3.1(vue@3.5.13(typescript@5.7.2))':
     dependencies:
       vue: 3.5.13(typescript@5.7.2)