A surgical instrument for fragmenting and extracting stones includes an outer sheath having a proximal end and a distal end and an inner core longitudinally extending through the core and longitudinally movable relative to the core. The outer sheath has a basket sized for entrapping the stones and located near the distal end of the outer sheath. The distal end of the inner core is longitudinally moveable from a retracted position within the basket to an extended position past the distal end of the outer sheath. The distal end of the inner core is also adapted to engage and fragment the stones. Longitudinal movement of the inner core relative to the outer sheath transforms the basket from an expanded condition to a collapsed condition to entrap stones within the basket and provide a small profile for insertion and withdrawal.