McCarthy, 23, was one of the most sought pitchers this off-season. In 2006, he was 4-7 with a 4.68 ERA.
"In our minds, this is one of the elite, young, now-ready, battle-tested pitchers in the game," said General Manager Jon Daniels on the Rangers' Web site. "As we go along, we've kept a list of the top young pitchers in the game and Brandon has always been at the top of the list."
In his career, McCarthy is 7-9 with 33 walks and 117 walks in 151 2/3 innings.
Texas also acquired 18-year-old outfielder David Paisano, who batted .338 for Chicago's Venezuelan Summer League team last season.