The 23-year-old, who had two years left on his previous contract, has committed to the club until June 2019.
Barrow made 25 appearances last season and became the first Gambian to score in the Premier League after finding the net against Bournemouth in March.
He is among the Swans squad which travels to America on Thursday for a two-game tour as part of the club's pre-season preparations.
Gambian winger Modou Barrow has signed a new three-year deal at Swansea City.