The Steelers announced Mendenhall's signing in a news release. Neither the team nor Mendenhall was immediately available for comment.
The 5-foot-10, 225-pound Mendenhall, the 23rd overall pick out of Illinois, is expected to discuss his contract when he arrives for training camp this weekend.
Limas Sweed, a wide receiver out of Texas and the Steelers' second-round pick, is the team's only unsigned draft pick, but coach Mike Tomlin and director of football operations Kevin Colbert have said they expect him to be signed in time for the start of training camp Sunday at St. Vincent College, near Latrobe.
Mendenhall's contract is reportedly worth nearly $12.6 million, with $7.125 million guaranteed.
"Both Rashard and I are thrilled," said Mendenhall's agent, Mike McCartney of Priority Sports in Chicago. "It's always an anxious time before training camp for players. He can now put the business side behind him. ... and work on helping the team win. That's what he wants to focus on."
Mendenhall is expected to return kicks and spell Willie Parker, whose 2007 season was cut short by a broken leg.
Parker, an undrafted free agent, has rushed for more than 1,202 yards in all three NFL seasons he has started, and carried the ball more than 650 times the last two seasons. Parker had 337 carries in 2006 and 321 last season, despite missing most of the final two games.
Mendenhall is the first running back drafted in the first round by the Steelers since Georgia's Tim Worley in 1989.
Mendenhall was last season's Big Ten Offensive Player of the Year, setting school records for rushing yards (1,681) and touchdowns (17) as a senior.