The 36-year-old Byrd, who broke in with Philadelphia in 2002 and played there for four seasons, inked a deal worth a reported $16 million.
He is coming off a stellar 2013 season, in which he hit .318 over 30 games after being dealt from the New York Mets to the Pittsburgh Pirates for a post-season push.
He went on to go 8-for-22 for Pittsburgh in the National League wild card game and the NL Division Series.
"Marlon adds a significant upgrade both offensively and defensively to our outfield," Phillies General Manager Ruben Amaro Jr. said. "With his talent and clubhouse presence, we believe Marlon will be a solid addition to our club as we address our needs and plan to contend in 2014 and beyond."