Everton said that the 22-year-old had signed a four-year contract. It has been reported that the transfer fee was £27 million.
The Lyon-born player started his career in Sochaux and played for Beveren in Belgium. He was part of the France squad that reached the semi-finals at the recent under-21 Euros.
Barry scored 11 goals last season for Villarreal after signing from FC Basel.
"For me, it is a dream to play in the Premier League. I think I proved in my career so far that I can adapt," Barry said.
"I think the fans here are, like, crazy people... I like this!"