The 32-year-old midfielder, who spent three years with the Blues from 2016 to 2019, has signed a two-year contract until the end of June 2024.
The Senegal international made 108 appearances for Everton before moving to PSG and going on to win two league titles and four domestic cups.
The defensive midfielder becomes Everton's seventh signing of the summer transfer window following the arrivals of defenders James Tarkowski, Ruben Vinagre and Conor Coady, midfielder Amadou Onana and forwards Dwight McNeil and Neal Maupay.
Gueye told evertontv: "There is no better feeling than coming back home. I am very happy to be here at Everton again, to help and to work hard. I'll give my soul to this team.
"Coming back here was important to me because I feel like I'm in my home. I've followed the team every week and watched how they play. For me, there is no better place than Everton, so that's why I chose to come back here.
"There is also a great atmosphere at the stadium and everyone here is like a family. I felt very, very good when I was here [the first time] and even when I went to Paris, I kept in touch with some of the players here and continued to support the team.
"For me, it's special. I told PSG if I am going to leave it will be for one team - and that was Everton.
"It was not a difficult decision for me because I love this club. That's why I had to come home. It's a pleasure for me to be back and hopefully we will have a good season because we have to go and try to achieve our goals."
Everton manager Frank Lampard said: "We are delighted to add a player of Idrissa's quality and experience to the squad. We have been eager to strengthen our midfield options and his attributes will undoubtedly benefit the squad.
"Idrissa has played at the highest level of football. Evertonians know all about his tireless work rate and the value he brings to a team, and we are looking forward to him bringing all of that now he's back at the Club."