The 27-year-old makes the switch to Goodison Park for a fee that could rise to £30million, based on various performance related bonuses.
Bolasie joined Palace from Bristol City in 2012, and went on to make 133 league appearances, scoring 12 times in the process.
"I'm looking forward to putting on the Everton shirt," Bolasie told evertontv. "This is a big club and I know all about it from having played against them over the years.
"For me, it was a no-brainer to come here. But now that I've come to Everton, the job is not done. I've got to work hard and feel my way in. I'm ready and up for the challenge.
"It's not about the money for me. It's about looking at the ambition of the Club and where they are trying to get to. I just like to play football.
"I just like to play football and it's going to be really interesting to learn from someone like Ronald Koeman, who was obviously a top centre-back as a player and he played with some of the best players in the world.
"The Club has made good signings, players like Ashley Williams who I know well - and I know that I've joined a club that not only has lots of quality players but one that produces lots of quality players, like Ross Barkley, as well.
"This season is going to be very interesting and I'm looking forward to being part of it here at Everton."