Monye, 21, is one of the most promising young players in European rugby and has thrilled crowds with his performances for Quins and England Sevens in recent months.
NEC Harlequins' Chief Executive, Mark Evans said of the signing: "We are very pleased that Ugo is staying with Quins for the foreseeable future. He has come up through the ranks of the Quins' Youth and Academy sides and it is always satisfying to see one of your own young players break through to top class rugby."
Monye commented: "I am very happy to be staying at Quins. The Club is making great progress and we are all looking forward to playing in the Heineken Cup this season. It has been my Club since I left school and I am delighted to have secured my future with Quins."