Napoli announced the deal Friday but did not disclose the transfer fee, which is reported to be up to 40 million euros ($44 million).
Lozano returns to the Champions League with the Carlo Ancelotti-coached Serie A runner-up after PSV was eliminated in the qualifying rounds last month.
Ancelotti says of Lozano: ''He's a complete player who can line up on the right or left, in the middle or even at center forward. ... We have everything we need to try and win the title.''
The 24-year-old Mexican helped PSV edge Ajax for the 2017-18 league title in his first season in the Netherlands.
In a statement on the Dutch club's website, Lozano says: ''I leave PSV as a happy and proud man.''
Lozano has played 35 times for Mexico and scored the only goal to beat Germany at the 2018 World Cup.
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