The 22-year-old Stewart led the team with 28 goals last season and finished with 64 points.
Financial terms weren't disclosed.
Colorado general manager Greg Sherman says the team is looking forward to seeing Stewart "build on what he started a year ago."
Colorado's young team slipped into the playoffs last season as the eighth seed in the Western Conference. The Avalanche were eliminated in the first round by the San Jose Sharks.
Copyright 2010 by The Associated Press
MORE NHL HEADLINES
- Rangers' Lundqvist wins 300th, blanks Wings
- Kings cruise past Oilers for 7th straight win
- B's tame Panthers, season-best streak at 5
- Stars call up goalie with Lehtonen in limbo
MOST SENT STORIES ON ESPN.COM
- G-III Women's Colorado Avalanche Alma Mater Grey Hoodie
- NHL Home
- Carolina Hurricanes
- Columbus B. Jackets
- New Jersey Devils
- New York Islanders
- New York Rangers
- Philadelphia Flyers
- Pittsburgh Penguins
- Washington Capitals
- Boston Bruins
- Buffalo Sabres
- Detroit Red Wings
- Florida Panthers
- Montreal Canadiens
- Ottawa Senators
- Tampa Bay Lightning
- Toronto Maple Leafs