The 34-year-old has put pen to paper on a three-year deal at the Vitality Stadium, keeping him with the Cherries until 2020.
The move sees Defoe return to his former club having spent a season on loan at Bournemouth as a teenager in 2000-01, scoring 19 goals in 31 appearances.
"It's great to be back and I'm really looking forward to this challenge," Defoe told the club's official website.
"When the opportunity came about to return to AFC Bournemouth I just knew it was the right one. It was an easy decision, joining a top team with a top manager. It's a great place to be.
"The Bournemouth fans know that every time I pull the shirt on I will give 100%, and the one thing I can guarantee is goals."
Manager Eddie Howe added: "This a huge moment for the football club and another step in the right direction. We want to bring players here who can have a big impact on our continued rise and we believe Jermain fits that as a natural, proven goalscorer.
"We have known him for a long time, since working with him as a young pro and playing with him. I have followed his career and am delighted to say he is going to be playing for AFC Bournemouth again."
Defoe scored 15 league goals for Sunderland last season but was unable to prevent the Black Cats from suffering relegation to the Championship.