Launchbury had been linked with an exit from the Ricoh Arena but has followed in the footsteps of Elliot Daly, Tom Cruse, Ashley Johnson, Rob Miller and Alex Rieder by renewing, though the length of the deal was not disclosed.
The 26-year-old made his Wasps debut in 2011 and has gone on to make 117 appearances for the club, earning 47 England caps in the process.
He played a key role in their run to the European Champions Cup semi-finals in 2015-16 and in making the last season's Premiership final, which they lost to Exeter Chiefs.
"I am delighted to sign a new contract to stay at Wasps. It's a place my family and I have come to call home over the past seven years and I'm really pleased to sign on again for a bit longer at the club, as we work hard to fulfil the ambitions we have as a squad," said Launchbury in a statement.
"Over the past few weeks, it has been great to see a number of players signing new contracts, enabling the club to retain quality players in what is already a fantastic squad.
"That reflects the belief we have in Dai [Young, director of rugby,] and in our squad, that together we can build on the progress we've made over the past few seasons and take our game to the next level. I really want to play my part in that moving forward.
"We've had our disappointments, but I feel over the past few years we've really shown our potential on both the European and domestic scene. I truly believe we can fulfil that potential over the coming years and really want to be part of that."
Young said: "We know a number of sides would have been keen for Joe to join them and it is a mark of his loyalty and belief in the squad we are assembling that he has put pen to paper to sign on again with Wasps.
"Joe has been with us for a long time and has stuck through the tougher times here. He has also experienced more recent times when we've been much more competitive and hopefully he can be around when we go the next step and achieve some silverware, which he deserves."