The 25-year-old has signed a four-year deal with the Eagles for an undisclosed fee, believed to be around £3.5million.
Former Reading gloveman McCarthy spent last season at Loftus Road, making four first team appearances, and will now complete with Palace number one Julian Speroni for a starting spot at Selhurst Park.
“I’m over the moon,” he told the club’s official website.
“When I first heard about Palace’s interest I was excited because I really wanted to be back in the Premier League.
“Towards the end of last season I started hearing little inklings about a move and then gradually over the summer things progressed and now, here I am.”
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