The 21-year-old right-back joined the club in 2011 and is established in the starting line-up.
He signed a long-term deal in July 2015 but had been linked with a move away, with his former club Barcelona - where he played in the youth teams - and Manchester City reportedly interested.
"I have been here a long time, I feel like this is my home and this is the right thing to do," Bellerin said.
"I am very happy to still be a Gunner for many more years."
Bellerin has made 67 top-flight appearances, including 11 this season before he was ruled out for four weeks with injury.
Spain defender Hector Bellerin has signed a new long-term deal at Arsenal.