A data extraction/insertion device in a digital signal processor and a method thereof are provided. The data extraction/insertion method is performed in a digital signal processor including a source register and a destination registr. In this digital signal processor, data is extracted from the source register and inserted into the destination register using a position value, which represents the reference position of data extraction, and an offset value, which represents the size of data to be extracted. Accordingly, a sequence of data packets, the size of which are given in neither byte nor word unit, are effectively extracted or inserted, thus saving the space of a memory.