Gibbons, 29, was eligible to become a free agent after the 2006 season.
"It really wasn't a thought in my mind," Gibbons said on the Orioles' Web site. "I thought if I played well enough for this organization and just continued to work hard, this was where I was going to be for my whole career. I hope this will be my home. I never really thought about free agency, and I was just happy to hear they wanted me on board for another four (years)."
Gibbons is the third Oriole to hit 100 home runs in his first five years with the team. The others are Eddie Murray and Cal Ripken, Jr.
In 2005, he batted .277 with 26 home runs and 79 RBI. His batting average tied a career high. Gibbons has a career average of .261 with 102 homers and 331 RBI.