Quantum systems comprised of interacting subsystems become highly correlated and their individual identities become entangled. This entanglement can be described using the Schmidt decomposition, in which a pair of preferred orthonormal bases can be constructed to emphasize the tight correlations between two quantum subsystems. Examples are given of how the Schmidt basis can be exploited to shed new light on entangled subsystems in quantum optics, paying special attention to two‐mode squeezed states and to atom–field interaction.