diff --git a/packages/context-state2/src/create-root.ts b/packages/context-state2/src/create-root.ts
index 5ed69d5..0a6126d 100644
--- a/packages/context-state2/src/create-root.ts
+++ b/packages/context-state2/src/create-root.ts
@@ -15,11 +15,11 @@ export function createRoot<KeyValue, KeyName extends string>(
 export function createRoot<KeyValue = never, KeyName extends string = "">(
   keyName?: KeyName,
 ): RootNode<KeyValue, KeyName> {
-  const internalNode = createStateNode<
-    null,
-    RootNodeKey<KeyName, KeyValue>,
-    null
-  >(keyName ? [keyName] : [], [], () => of(null))
+  const internalNode = createStateNode<RootNodeKey<KeyName, KeyValue>, null>(
+    keyName ? [keyName] : [],
+    [],
+    () => of(null),
+  )
 
   internalNode.public.getState$ = () => {
     throw new Error("RootNode doesn't have value")
diff --git a/packages/context-state2/src/index.tsx b/packages/context-state2/src/index.tsx
index 5fe6acc..c1665c9 100644
--- a/packages/context-state2/src/index.tsx
+++ b/packages/context-state2/src/index.tsx
@@ -1,5 +1,6 @@
 export * from "./create-root"
 export * from "./route-state"
+export * from "./subinstance"
 export * from "./substate"
 export * from "./types"
 export { StatePromise } from "./internal/promises"
diff --git a/packages/context-state2/src/internal/state-node.ts b/packages/context-state2/src/internal/state-node.ts
index 1025470..f123b0e 100644
--- a/packages/context-state2/src/internal/state-node.ts
+++ b/packages/context-state2/src/internal/state-node.ts
@@ -47,9 +47,9 @@ interface GetObservableFn<K> {
   ): Observable<T>
 }
 
-export function createStateNode<T, K extends KeysBaseType, R>(
+export function createStateNode<K extends KeysBaseType, R>(
   keysOrder: Array<keyof K>,
-  parents: Array<InternalStateNode<T, K>>,
+  parents: Array<InternalStateNode<unknown, any>>,
   instanceCreator: (
     getContext: <R>(node: InternalStateNode<R, K>) => R,
     getObservable: GetObservableFn<K>,
@@ -67,7 +67,7 @@ export function createStateNode<T, K extends KeysBaseType, R>(
   }
 
   const getContext = <TC>(
-    otherNode: InternalStateNode<TC, K>,
+    otherNode: InternalStateNode<TC, any>,
     key: K,
     visited = new Set<InternalStateNode<any, any>>(),
   ) => {
diff --git a/packages/context-state2/src/subinstance.test.ts b/packages/context-state2/src/subinstance.test.ts
new file mode 100644
index 0000000..47347b5
--- /dev/null
+++ b/packages/context-state2/src/subinstance.test.ts
@@ -0,0 +1,55 @@
+import { Subject, filter, map, startWith } from "rxjs"
+import { InstanceUpdate, createRoot, subinstance } from "./"
+
+describe("subinstance", () => {
+  it("works", () => {
+    const root = createRoot()
+    const instance$ = new Subject<InstanceUpdate<string>>()
+    const updates$ = new Subject<{ key: string; value: string }>()
+    const instanceNode = subinstance(
+      root,
+      "keyName",
+      () => instance$,
+      (id) =>
+        updates$.pipe(
+          filter((v) => v.key === id),
+          map((v) => v.value),
+          startWith(id),
+        ),
+    )
+    root.run()
+
+    instance$.next({
+      type: "add",
+      key: "a",
+    })
+    expect(instanceNode.getValue({ keyName: "a" })).toEqual("a")
+
+    instance$.next({
+      type: "add",
+      key: "b",
+    })
+    expect(instanceNode.getValue({ keyName: "a" })).toEqual("a")
+    expect(instanceNode.getValue({ keyName: "b" })).toEqual("b")
+
+    updates$.next({
+      key: "a",
+      value: "new A value",
+    })
+    expect(instanceNode.getValue({ keyName: "a" })).toEqual("new A value")
+    expect(instanceNode.getValue({ keyName: "b" })).toEqual("b")
+
+    instance$.next({
+      type: "remove",
+      key: "a",
+    })
+    expect(() => instanceNode.getValue({ keyName: "a" })).toThrow()
+    expect(instanceNode.getValue({ keyName: "b" })).toEqual("b")
+
+    instance$.next({
+      type: "remove",
+      key: "b",
+    })
+    expect(() => instanceNode.getValue({ keyName: "b" })).toThrow()
+  })
+})
diff --git a/packages/context-state2/src/subinstance.ts b/packages/context-state2/src/subinstance.ts
new file mode 100644
index 0000000..5886c60
--- /dev/null
+++ b/packages/context-state2/src/subinstance.ts
@@ -0,0 +1,149 @@
+import { Observable, map, scan, startWith } from "rxjs"
+import { NestedMap, createStateNode, getInternals } from "./internal"
+import { substate } from "./substate"
+import {
+  CtxFn,
+  GetObservableFn,
+  GetValueFn,
+  KeysBaseType,
+  StateNode,
+  isSignal,
+} from "./types"
+
+export interface InstanceUpdate<K> {
+  type: "add" | "remove"
+  key: K
+}
+
+type MergeKey<K extends KeysBaseType, KN extends string, KV> = {
+  [key in keyof K | KN]: (K & Record<KN, KV>)[key]
+}
+
+export type InstanceCtxFn<T, K extends KeysBaseType, Id> = (
+  id: Id,
+  ctxValue: GetValueFn,
+  ctxObservable: GetObservableFn<K>,
+  key: K,
+) => Observable<T>
+
+export function subinstance<
+  T,
+  K extends KeysBaseType,
+  KN extends string,
+  KV,
+  R,
+>(
+  parent: StateNode<T, K>,
+  keyName: KN,
+  keySelector: CtxFn<InstanceUpdate<KV>, K>,
+  instanceObs: InstanceCtxFn<R, MergeKey<K, KN, KV>, KV>,
+): StateNode<R, MergeKey<K, KN, KV>> {
+  const instanceKeys = substate(
+    parent,
+    (ctx, getObs, key) => {
+      const keys = Object.assign(new Set<KV>(), {
+        lastUpdate: null,
+      } as {
+        lastUpdate: InstanceUpdate<KV> | null
+      })
+      return keySelector(ctx, getObs, key).pipe(
+        scan((acc, change) => {
+          acc.lastUpdate = change
+          if (change.type === "add") {
+            acc.add(change.key)
+          } else {
+            acc.delete(change.key)
+          }
+          return acc
+        }, keys),
+        startWith(keys),
+      )
+    },
+    () => false,
+  )
+
+  const parentInternals = getInternals(parent)
+  const result = createStateNode<MergeKey<K, KN, KV>, R>(
+    [...parentInternals.keysOrder, keyName],
+    [parentInternals],
+    (ctx, obs, key) =>
+      // TODO common pattern, mapping the CtxFn from internal to external
+      instanceObs(
+        key[keyName],
+        (node) => ctx(getInternals(node)),
+        ((node, keys) =>
+          obs(
+            isSignal(node) ? node : getInternals(node),
+            keys,
+          )) as GetObservableFn<MergeKey<K, KN, KV>>,
+        key,
+      ),
+  )
+
+  const parentInstanceWatches = new NestedMap<K[keyof K], () => void>()
+  function watchParentInstance(key: K) {
+    const sub = instanceKeys
+      .getState$(key)
+      .pipe(map((v, i) => [v, i] as const))
+      .subscribe(([v, i]) => {
+        if (i === 0) {
+          for (let instanceKey of v) {
+            result.addInstance({
+              ...key,
+              [keyName]: instanceKey,
+            })
+          }
+          for (let instanceKey of v) {
+            result.activateInstance({
+              ...key,
+              [keyName]: instanceKey,
+            })
+          }
+        } else {
+          if (v.lastUpdate?.type === "add") {
+            result.addInstance({
+              ...key,
+              [keyName]: v.lastUpdate.key,
+            })
+            result.activateInstance({
+              ...key,
+              [keyName]: v.lastUpdate.key,
+            })
+          } else if (v.lastUpdate?.type === "remove") {
+            result.removeInstance({
+              ...key,
+              [keyName]: v.lastUpdate.key,
+            })
+          }
+        }
+      })
+
+    parentInstanceWatches.set(
+      parentInternals.keysOrder.map((k) => key[k]),
+      () => sub.unsubscribe(),
+    )
+  }
+  function stopWatchParentInstance(key: K) {
+    const orderedKey = parentInternals.keysOrder.map((k) => key[k])
+    const teardown = parentInstanceWatches.get(orderedKey)
+    parentInstanceWatches.delete(orderedKey)
+    teardown?.()
+  }
+
+  // TODO this pattern is common on all operators... maybe it can be abstracted away? watch parent instances, do something on them, tear down their subscriptions.
+  for (let instance of parentInternals.getInstances()) {
+    watchParentInstance(instance.key)
+  }
+
+  parentInternals.instanceChange$.subscribe((change) => {
+    if (change.type === "added") {
+      watchParentInstance(change.key)
+    } else if (change.type === "removed") {
+      stopWatchParentInstance(change.key)
+    }
+  })
+
+  return Object.assign(result.public, {
+    instanceKeys,
+  })
+}
diff --git a/packages/context-state2/src/types.ts b/packages/context-state2/src/types.ts
index 17d6a95..a792436 100644
--- a/packages/context-state2/src/types.ts
+++ b/packages/context-state2/src/types.ts
@@ -27,7 +27,7 @@ export function isSignal<T, CK extends KeysBaseType>(
   )
 }
 
-interface GetObservableFn<K> {
+export interface GetObservableFn<K> {
   <T, CK extends KeysBaseType>(
     other: K extends CK ? StateNode<T, CK> | Signal<T, CK> : never,
   ): Observable<T>