The 18-year-old, who joined the club's academy in 2014, has penned a fresh deal that will keep him at Old Trafford until June 2020.
Fosu-Mensah, who made his first-team debut against Arsenal last season, has the option to extend his deal by a further year.
I am delighted to have signed a New contract here At Manchester United🙏🏾 pic.twitter.com/6X7KAtdFQP— Timothy fosu-mensah (@timboo95) October 19, 2016
"I am delighted to have signed a new contract here at Manchester United," Fosu-Mensah told the club's official website. "I have enjoyed every minute since I joined this great club and I want to continue the progress that I feel I have made so far.
"I am learning every day from the manager and the coaching staff. I appreciate the trust that the club has in me and I want to repay that with my performances on the pitch."
Manager Jose Mourinho added: "Tim is young player with great potential. I am pleased that he has signed a new contract and I am delighted at the progress he has made so far. It is clear to see that he is learning every day in training and there will be plenty of opportunities for him as the season continues."
Fosu-Mensah has made 12 first-team appearances for United so far.