The 27-year-old midfielder was signed by the Cherries from non-league Woking for just £4,000 in 2010.
Arter has gone on to become a key element in the south coast club's rise through the divisions all the way the Premier League, where they have consolidated their position.
"Once I heard the club wanted to give me a new deal, it was a pretty easy decision," Arter told the Bournemouth club website.
"The team has been successful over the last few years and you want to be part of somewhere that is continually progressing. I just want to improve all the time and it's nice to be part of a squad who are all trying to do that, too."
Manager Eddie Howe, meanwhile, added: "Harry has been such an important player for us over a long period of time. He is a real winner and has been at the heart of most of the good things that have happened on the pitch.
"He has been outstanding in terms of his conduct and attitude to the group and it's great news that he has committed his future to the club."
The Republic of Ireland midfielder, who began his career at Charlton Athletic, made 35 appearances for Bournemouth last season as they finished ninth in the top flight.