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The former England Under 20's hooker made 27 appearances for Harlequins last season, eight of which came in European action and he is delighted to have secured his future at the club.
"I am really pleased to have re-signed with Quins. Since joining Harlequins two years ago, not only has my rugby improved but also my enjoyment for the game," said Gray.
"The team plays a great style of rugby and I am excited about the future."
Director of rugby, Conor O'Shea, added, "Joe has made an incredible impact at Harlequins and in the Aviva Premiership, and finishing up in the Saxons group last season was just reward for his work.
"The person, as much as the player, is an important part of what we believe in, and in Joe we have someone who embodies our values to the full. We believe Joe has the ability to get better and better and we are looking forward to him achieving his goals with us over the coming years."
