diff --git a/homeassistant/components/config/entity_registry.py b/homeassistant/components/config/entity_registry.py
index f024f146a60..6e4fa30e205 100644
--- a/homeassistant/components/config/entity_registry.py
+++ b/homeassistant/components/config/entity_registry.py
@@ -71,6 +71,7 @@ async def websocket_get_entity(hass, connection, msg):
         # If passed in, we update value. Passing None will remove old value.
         vol.Optional("name"): vol.Any(str, None),
         vol.Optional("icon"): vol.Any(str, None),
+        vol.Optional("area_id"): vol.Any(str, None),
         vol.Optional("new_entity_id"): str,
         # We only allow setting disabled_by user via API.
         vol.Optional("disabled_by"): vol.Any("user", None),
@@ -91,7 +92,7 @@ async def websocket_update_entity(hass, connection, msg):
 
     changes = {}
 
-    for key in ("name", "icon", "disabled_by"):
+    for key in ("name", "icon", "area_id", "disabled_by"):
         if key in msg:
             changes[key] = msg[key]
 
@@ -149,6 +150,7 @@ def _entry_dict(entry):
     return {
         "config_entry_id": entry.config_entry_id,
         "device_id": entry.device_id,
+        "area_id": entry.area_id,
         "disabled_by": entry.disabled_by,
         "entity_id": entry.entity_id,
         "name": entry.name,
diff --git a/homeassistant/components/search/__init__.py b/homeassistant/components/search/__init__.py
index a3bbd3844aa..81e33aa24b5 100644
--- a/homeassistant/components/search/__init__.py
+++ b/homeassistant/components/search/__init__.py
@@ -122,6 +122,10 @@ class Searcher:
         """Resolve an area."""
         for device in device_registry.async_entries_for_area(self._device_reg, area_id):
             self._add_or_resolve("device", device.id)
+        for entity_entry in entity_registry.async_entries_for_area(
+            self._entity_reg, area_id
+        ):
+            self._add_or_resolve("entity", entity_entry.entity_id)
 
     @callback
     def _resolve_device(self, device_id) -> None:
diff --git a/homeassistant/helpers/area_registry.py b/homeassistant/helpers/area_registry.py
index 347e552a012..b8f7952cd5a 100644
--- a/homeassistant/helpers/area_registry.py
+++ b/homeassistant/helpers/area_registry.py
@@ -1,5 +1,5 @@
 """Provide a way to connect devices to one physical location."""
-from asyncio import Event
+from asyncio import Event, gather
 from collections import OrderedDict
 from typing import Dict, Iterable, List, MutableMapping, Optional, cast
 
@@ -64,8 +64,12 @@ class AreaRegistry:
 
     async def async_delete(self, area_id: str) -> None:
         """Delete area."""
-        device_registry = await self.hass.helpers.device_registry.async_get_registry()
+        device_registry, entity_registry = await gather(
+            self.hass.helpers.device_registry.async_get_registry(),
+            self.hass.helpers.entity_registry.async_get_registry(),
+        )
         device_registry.async_clear_area_id(area_id)
+        entity_registry.async_clear_area_id(area_id)
 
         del self.areas[area_id]
 
diff --git a/homeassistant/helpers/entity_registry.py b/homeassistant/helpers/entity_registry.py
index 14dce1d6d2c..872d87e732f 100644
--- a/homeassistant/helpers/entity_registry.py
+++ b/homeassistant/helpers/entity_registry.py
@@ -83,6 +83,7 @@ class RegistryEntry:
     name: Optional[str] = attr.ib(default=None)
     icon: Optional[str] = attr.ib(default=None)
     device_id: Optional[str] = attr.ib(default=None)
+    area_id: Optional[str] = attr.ib(default=None)
     config_entry_id: Optional[str] = attr.ib(default=None)
     disabled_by: Optional[str] = attr.ib(
         default=None,
@@ -204,6 +205,7 @@ class EntityRegistry:
         # Data that we want entry to have
         config_entry: Optional["ConfigEntry"] = None,
         device_id: Optional[str] = None,
+        area_id: Optional[str] = None,
         capabilities: Optional[Dict[str, Any]] = None,
         supported_features: Optional[int] = None,
         device_class: Optional[str] = None,
@@ -223,6 +225,7 @@ class EntityRegistry:
                 entity_id,
                 config_entry_id=config_entry_id or _UNDEF,
                 device_id=device_id or _UNDEF,
+                area_id=area_id or _UNDEF,
                 capabilities=capabilities or _UNDEF,
                 supported_features=supported_features or _UNDEF,
                 device_class=device_class or _UNDEF,
@@ -253,6 +256,7 @@ class EntityRegistry:
             entity_id=entity_id,
             config_entry_id=config_entry_id,
             device_id=device_id,
+            area_id=area_id,
             unique_id=unique_id,
             platform=platform,
             disabled_by=disabled_by,
@@ -302,6 +306,7 @@ class EntityRegistry:
         *,
         name=_UNDEF,
         icon=_UNDEF,
+        area_id=_UNDEF,
         new_entity_id=_UNDEF,
         new_unique_id=_UNDEF,
         disabled_by=_UNDEF,
@@ -313,6 +318,7 @@ class EntityRegistry:
                 entity_id,
                 name=name,
                 icon=icon,
+                area_id=area_id,
                 new_entity_id=new_entity_id,
                 new_unique_id=new_unique_id,
                 disabled_by=disabled_by,
@@ -329,6 +335,7 @@ class EntityRegistry:
         config_entry_id=_UNDEF,
         new_entity_id=_UNDEF,
         device_id=_UNDEF,
+        area_id=_UNDEF,
         new_unique_id=_UNDEF,
         disabled_by=_UNDEF,
         capabilities=_UNDEF,
@@ -348,6 +355,7 @@ class EntityRegistry:
             ("icon", icon),
             ("config_entry_id", config_entry_id),
             ("device_id", device_id),
+            ("area_id", area_id),
             ("disabled_by", disabled_by),
             ("capabilities", capabilities),
             ("supported_features", supported_features),
@@ -425,6 +433,7 @@ class EntityRegistry:
                     entity_id=entity["entity_id"],
                     config_entry_id=entity.get("config_entry_id"),
                     device_id=entity.get("device_id"),
+                    area_id=entity.get("area_id"),
                     unique_id=entity["unique_id"],
                     platform=entity["platform"],
                     name=entity.get("name"),
@@ -456,6 +465,7 @@ class EntityRegistry:
                 "entity_id": entry.entity_id,
                 "config_entry_id": entry.config_entry_id,
                 "device_id": entry.device_id,
+                "area_id": entry.area_id,
                 "unique_id": entry.unique_id,
                 "platform": entry.platform,
                 "name": entry.name,
@@ -483,6 +493,13 @@ class EntityRegistry:
         ]:
             self.async_remove(entity_id)
 
+    @callback
+    def async_clear_area_id(self, area_id: str) -> None:
+        """Clear area id from registry entries."""
+        for entity_id, entry in self.entities.items():
+            if area_id == entry.area_id:
+                self._async_update_entity(entity_id, area_id=None)  # type: ignore
+
     def _register_entry(self, entry: RegistryEntry) -> None:
         self.entities[entry.entity_id] = entry
         self._add_index(entry)
@@ -521,6 +538,14 @@ def async_entries_for_device(
     ]
 
 
+@callback
+def async_entries_for_area(
+    registry: EntityRegistry, area_id: str
+) -> List[RegistryEntry]:
+    """Return entries that match an area."""
+    return [entry for entry in registry.entities.values() if entry.area_id == area_id]
+
+
 @callback
 def async_entries_for_config_entry(
     registry: EntityRegistry, config_entry_id: str
diff --git a/homeassistant/helpers/service.py b/homeassistant/helpers/service.py
index d03fb8c91c6..0993f490537 100644
--- a/homeassistant/helpers/service.py
+++ b/homeassistant/helpers/service.py
@@ -234,6 +234,15 @@ async def async_extract_entity_ids(
             hass.helpers.device_registry.async_get_registry(),
             hass.helpers.entity_registry.async_get_registry(),
         )
+
+        extracted.update(
+            entry.entity_id
+            for area_id in area_ids
+            for entry in hass.helpers.entity_registry.async_entries_for_area(
+                ent_reg, area_id
+            )
+        )
+
         devices = [
             device
             for area_id in area_ids
@@ -247,6 +256,7 @@ async def async_extract_entity_ids(
             for entry in hass.helpers.entity_registry.async_entries_for_device(
                 ent_reg, device.id
             )
+            if not entry.area_id
         )
 
     return extracted
diff --git a/tests/components/config/test_entity_registry.py b/tests/components/config/test_entity_registry.py
index d63d10437cc..84a646ed2ef 100644
--- a/tests/components/config/test_entity_registry.py
+++ b/tests/components/config/test_entity_registry.py
@@ -39,6 +39,7 @@ async def test_list_entities(hass, client):
         {
             "config_entry_id": None,
             "device_id": None,
+            "area_id": None,
             "disabled_by": None,
             "entity_id": "test_domain.name",
             "name": "Hello World",
@@ -48,6 +49,7 @@ async def test_list_entities(hass, client):
         {
             "config_entry_id": None,
             "device_id": None,
+            "area_id": None,
             "disabled_by": None,
             "entity_id": "test_domain.no_name",
             "name": None,
@@ -84,6 +86,7 @@ async def test_get_entity(hass, client):
     assert msg["result"] == {
         "config_entry_id": None,
         "device_id": None,
+        "area_id": None,
         "disabled_by": None,
         "platform": "test_platform",
         "entity_id": "test_domain.name",
@@ -107,6 +110,7 @@ async def test_get_entity(hass, client):
     assert msg["result"] == {
         "config_entry_id": None,
         "device_id": None,
+        "area_id": None,
         "disabled_by": None,
         "platform": "test_platform",
         "entity_id": "test_domain.no_name",
@@ -143,7 +147,7 @@ async def test_update_entity(hass, client):
     assert state.name == "before update"
     assert state.attributes[ATTR_ICON] == "icon:before update"
 
-    # UPDATE NAME & ICON
+    # UPDATE NAME & ICON & AREA
     await client.send_json(
         {
             "id": 6,
@@ -151,6 +155,7 @@ async def test_update_entity(hass, client):
             "entity_id": "test_domain.world",
             "name": "after update",
             "icon": "icon:after update",
+            "area_id": "mock-area-id",
         }
     )
 
@@ -159,6 +164,7 @@ async def test_update_entity(hass, client):
     assert msg["result"] == {
         "config_entry_id": None,
         "device_id": None,
+        "area_id": "mock-area-id",
         "disabled_by": None,
         "platform": "test_platform",
         "entity_id": "test_domain.world",
@@ -204,6 +210,7 @@ async def test_update_entity(hass, client):
     assert msg["result"] == {
         "config_entry_id": None,
         "device_id": None,
+        "area_id": "mock-area-id",
         "disabled_by": None,
         "platform": "test_platform",
         "entity_id": "test_domain.world",
@@ -252,6 +259,7 @@ async def test_update_entity_no_changes(hass, client):
     assert msg["result"] == {
         "config_entry_id": None,
         "device_id": None,
+        "area_id": None,
         "disabled_by": None,
         "platform": "test_platform",
         "entity_id": "test_domain.world",
@@ -329,6 +337,7 @@ async def test_update_entity_id(hass, client):
     assert msg["result"] == {
         "config_entry_id": None,
         "device_id": None,
+        "area_id": None,
         "disabled_by": None,
         "platform": "test_platform",
         "entity_id": "test_domain.planet",
diff --git a/tests/helpers/test_entity_registry.py b/tests/helpers/test_entity_registry.py
index 8f5f8fc501b..336329396cc 100644
--- a/tests/helpers/test_entity_registry.py
+++ b/tests/helpers/test_entity_registry.py
@@ -154,6 +154,7 @@ async def test_loading_saving_data(hass, registry):
         "hue",
         "5678",
         device_id="mock-dev-id",
+        area_id="mock-area-id",
         config_entry=mock_config,
         capabilities={"max": 100},
         supported_features=5,
@@ -182,6 +183,7 @@ async def test_loading_saving_data(hass, registry):
     assert orig_entry2 == new_entry2
 
     assert new_entry2.device_id == "mock-dev-id"
+    assert new_entry2.area_id == "mock-area-id"
     assert new_entry2.disabled_by == entity_registry.DISABLED_HASS
     assert new_entry2.capabilities == {"max": 100}
     assert new_entry2.supported_features == 5
@@ -330,6 +332,19 @@ async def test_removing_config_entry_id(hass, registry, update_events):
     assert update_events[1]["entity_id"] == entry.entity_id
 
 
+async def test_removing_area_id(registry):
+    """Make sure we can clear area id."""
+    entry = registry.async_get_or_create("light", "hue", "5678")
+
+    entry_w_area = registry.async_update_entity(entry.entity_id, area_id="12345A")
+
+    registry.async_clear_area_id("12345A")
+    entry_wo_area = registry.async_get(entry.entity_id)
+
+    assert not entry_wo_area.area_id
+    assert entry_w_area != entry_wo_area
+
+
 async def test_migration(hass):
     """Test migration from old data to new."""
     mock_config = MockConfigEntry(domain="test-platform", entry_id="test-config-id")
diff --git a/tests/helpers/test_service.py b/tests/helpers/test_service.py
index 929df2a32e0..6f2cd4ba130 100644
--- a/tests/helpers/test_service.py
+++ b/tests/helpers/test_service.py
@@ -105,12 +105,32 @@ def area_mock(hass):
         },
     )
 
+    entity_in_own_area = ent_reg.RegistryEntry(
+        entity_id="light.in_own_area",
+        unique_id="in-own-area-id",
+        platform="test",
+        area_id="own-area",
+    )
     entity_in_area = ent_reg.RegistryEntry(
         entity_id="light.in_area",
         unique_id="in-area-id",
         platform="test",
         device_id=device_in_area.id,
     )
+    entity_in_other_area = ent_reg.RegistryEntry(
+        entity_id="light.in_other_area",
+        unique_id="in-other-area-id",
+        platform="test",
+        device_id=device_in_area.id,
+        area_id="other-area",
+    )
+    entity_assigned_to_area = ent_reg.RegistryEntry(
+        entity_id="light.assigned_to_area",
+        unique_id="assigned-area-id",
+        platform="test",
+        device_id=device_in_area.id,
+        area_id="test-area",
+    )
     entity_no_area = ent_reg.RegistryEntry(
         entity_id="light.no_area",
         unique_id="no-area-id",
@@ -126,7 +146,10 @@ def area_mock(hass):
     mock_registry(
         hass,
         {
+            entity_in_own_area.entity_id: entity_in_own_area,
             entity_in_area.entity_id: entity_in_area,
+            entity_in_other_area.entity_id: entity_in_other_area,
+            entity_assigned_to_area.entity_id: entity_assigned_to_area,
             entity_no_area.entity_id: entity_no_area,
             entity_diff_area.entity_id: entity_diff_area,
         },
@@ -298,15 +321,25 @@ async def test_extract_entity_ids(hass):
 
 async def test_extract_entity_ids_from_area(hass, area_mock):
     """Test extract_entity_ids method with areas."""
+    call = ha.ServiceCall("light", "turn_on", {"area_id": "own-area"})
+
+    assert {
+        "light.in_own_area",
+    } == await service.async_extract_entity_ids(hass, call)
+
     call = ha.ServiceCall("light", "turn_on", {"area_id": "test-area"})
 
-    assert {"light.in_area"} == await service.async_extract_entity_ids(hass, call)
+    assert {
+        "light.in_area",
+        "light.assigned_to_area",
+    } == await service.async_extract_entity_ids(hass, call)
 
     call = ha.ServiceCall("light", "turn_on", {"area_id": ["test-area", "diff-area"]})
 
     assert {
         "light.in_area",
         "light.diff_area",
+        "light.assigned_to_area",
     } == await service.async_extract_entity_ids(hass, call)
 
     assert (