The 24-year-old has made 76 appearances since arriving at Goodison Park almost two years ago from Wigan Athletic.
"I’m buzzing and delighted to be committing my future long-term to Everton," McCarthy, who has 27 international caps, told evertontv.
"I’ve loved every minute I’ve been here, with the fans having made me feel so welcome from day one, as well as the players and staff.
"The gaffer is trying to build a team and a squad for the long-term and I’m excited to be a part of that and to be a part of this team."
(Writing by Ken Ferris, editing by Pritha Sarkar)
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