The 19-year-old, who spent three months on loan at Doncaster Rovers last season, will remain with the Glovers until January 1.
Lundstram believes that the move will provide him with the opportunity to play first-team football.
"I really enjoyed my loan spell at Doncaster last season and now is probably the right time to go back out and play some competitive football again," he told Everton's official website.
"It's a chance to step up and play in the Championship, so I'm really excited and I'll look to build on the experience I got last season."
Lundstram made 14 appearances during his spell with Doncaster.