Wilson impressed for the Cherries last season and emerged as the club’s top scorer with 15 goals in all competitions.
The 27-year-old was strongly linked with a move to Chelsea in the January transfer window and West Ham United also had an eye on his contract situation at last season’s 14th placed club but Wilson will be staying put with Eddie Howe’s side.
"We've improved in all areas since I initially joined the club but there's still a long way to go," Wilson told Bournemouth's club website.
"While Bournemouth may be known as a smaller club, we've got some really big ambitions here. Everyone is pulling in the same direction towards those targets and goals.
"I feel like as an individual, my game is constantly improving here at the club. I want to continue that progress and reach even higher targets. I'm really excited about what the future holds."
Wilson joined Bournemouth from Coventry City in 2014 and has scored a total of 58 goals from 148 appearances.
Wilson has shown great mental fortitude to come back from two season-ending cruciate knee ligament injuries in recent years before earning the first of his three England caps last December.
Ryan Fraser, Nathan Ake and David Brooks have all been linked with moves to bigger clubs in the transfer window but Bournemouth chief executive Neill Blake says Wilson’s commitment shows the club intend to keep their best players.
"Throughout his time at the club Callum has demonstrated incredible determination to succeed at the highest level - even in the face of adversity in the form of two season-ending injuries," Blake added.
"He has proved himself as a Premier League striker and is now beginning to establish himself at international level, and this contract is just reward for that.
"We have no desire to lose our best players and this is further evidence of the board's commitment to keep Bournemouth progressing year on year."
