Calafiori joins the Gunners from Serie A overachievers Bologna on a five-year deal.
The transfer fee is around £38 million - half of which will go to the defender's former club, Basel.
'Special skills'
Arsenal sporting director Edu has spoken enthusiastically about Calafiori's abilities.
"Riccardo has proven his qualities for his club and his country time and time again," he said in a press release.
"He was one of the best players in Serie A last season and performed strongly for Italy at the European Championships in the summer.
"Mikel (Arteta) and our coaches are looking forward to working with Riccardo and we are all looking forward to seeing him in our shirt."
Arteta himself added: "Riccardo is a great personality with special skills that will make us even stronger on our way to winning major trophies.
"He made a great development last year at Bologna and for Italy. His progress and development have been really impressive."
The 22-year-old has been given Arsenal's number 33 shirt.
