The 29-year-old arrived on a busy Tuesday for Roma, with Radja Nainggolan having completed his €38m (£33.5m/$44m) departure to Inter and Davide Santon and Nicolo Zaniolo moving in the opposite direction for a combined €14m.
The playmaker spent two productive seasons in Serie A with Palermo prior to his move to Paris, and he is delighted to be back in familiar surroundings.
"I am very happy to be here at Roma. It is great to return to Italy and to do it with such a great club," said Pastore in a statement.
"I hope to repay in full all the enthusiasm, support and affection that Roma fans have shown me already."
Pastore has been capped 29 times by Argentina and was named Serie A Young Footballer of the Year in 2010, having helped Palermo to a fifth-place finish and a spot in the Europa League.
Roma sporting director Monchi said: "The signing of Javier makes me very happy because we are talking about the sort of player who can excite the fans he plays for.
"In my career as a sporting director I have signed a lot of players, but Javier might just be the one with the most talent."