The contract is worth $91.5 million with $42 million guaranteed. Peppers will make $40.5 million over the first three years. The number could increase if he makes the Pro Bowl, records a certain number of sacks or is defensive player of the year.
"It's one thing to play football in this league and make a living, but it's a totally different thing to come to a place with a rich tradition like the Bears," Peppers said.
Peppers received $18.2 million from the Carolina Panthers last season. He turned down a four-year, $54 million contract offer from the Panthers last year.
Peppers has the potential to make close to $110 million in the seven-year period between 2009 and 2016.
"The guy's a monster, he's an animal," Bears defensive end Alex Brown said Thursday on "The Waddle & Silvy Show" on ESPN 1000. "He's the biggest guy and fastest guy I think I've ever seen.
"He's as gifted as [linebacker Brian] Urlacher, I think. He's just about 30 pounds heavier. He's unbelievable."
The 6-foot-7 Peppers brings uncanny athletic ability but questionable consistency, along with the 81 sacks he collected in eight seasons with Carolina -- 10½ last year. In Chicago, he'll get to play alongside Lance Briggs, Urlacher and Tommie Harris and give a much-needed boost to a defense that ranked 17th overall and tied for 13th in sacks with 35. And maybe, he'll shoot down a reputation for taking plays off, one that he feels is unwarranted.
"Sometimes, you're on the field, you get tired," he said. "If I'm not playing as hard on play 66 as I was on play No. 1, then ... come on."
John Clayton is a senior NFL writer for ESPN.com. The Associated Press contributed to this report.