The 21-year-old midfielder joins after four seasons at Liverpool, where he played in the Reds' youth setup.
The San Jose Earthquakes announced they have signed U.S. youth national team midfielder Marc Pelosi via the league's allocation order.
Pelosi, 21, was released by Liverpool last month after spending four years at the club and failing to make a first-team appearance.
"Marc is a good young player with a bright future," Earthquakes general manager John Doyle said in a release. "We are happy to bring him to his hometown club."
Pelosi started strong at Liverpool after being signed following a standout performance at the 2011 U-17 World Cup.