Traore has signed a two-year contract, with Fulham having the option for a further year.
Traore was a free agent after his contract with Wolverhampton Wanderers expired this summer.
The 27-year-old has long been viewed as one of the most dangerous wingers in the Premier League but his end product has often been called into question.
Traore registered 20 goals and 14 assists in 194 appearances across all competitions for Wolves in his five seasons at the club.
He arrives at Craven Cottage as Fulham's third summer signing, joining Calvin Bassey and former Wolves teammate Raul Jimenez.
"It’s a nice opportunity for me," Traore told the club's official website.
"Another chapter. I like the Club, I also have information from Raúl [Jimenéz], who seems to love the club.
"I’m excited and hungry to give 100 per cent here."
Commenting on Traore's arrival, Fulham vice-chairman Tony Khan said: "I'm thrilled to welcome Adama Traore to Fulham Football Club. He's an explosive and powerful winger with great pace, and he has tremendous experience in the Premier League.
"He's a player with whom we are very familiar, and he's been on the opposing side of our team on numerous occasions; I believe that he'll be a great addition to Marco's squad."
Traore has won eight caps for the Spanish national team.
Fulham started the new season with a 1-0 win at Everton on Saturday.
