Qualitative research can produce a rich understanding of a phenomenon but requires an essential and strenuous data annotation process known as coding. Coding can be repetitive and time-consuming, particularly for large datasets. Existing AI-based approaches for partially automating coding, like supervised machine learning (ML) or explicit knowledge represented in code rules, require high technical literacy and lack transparency. Further, little is known about the interaction of researchers with AI-based coding assistance. We introduce Cody, an AI-based system that semi-automates coding through code rules and supervised ML. Cody supports researchers with interactively (re)defining code rules and uses ML to extend coding to unseen data. In two studies with qualitative researchers, we found that (1) code rules provide structure and transparency, (2) explanations are commonly desired but rarely used, (3) suggestions benefit coding quality rather than coding speed, increasing the intercoder reliability, calculated with Krippendorff’s Alpha, from 0.085 (MAXQDA) to 0.33 (Cody).