The Morocco forward has joined the Rossoneri for the rest of the season, despite having only joined Fulham on a season-long loan from relegated QPR last summer.
A statement from AC Milan read: "AC Milan announces that Adel Taarabt has joined on loan from QPR, with an option to sign the player at the end of the season."
The 24-year-old striker made just 16 appearances in all competitions for the Cottagers.
Taarabt becomes Milan's fourth reinforcement in the winter transfer window following the arrivals of Japanese playmaker Keisuke Honda from CSKA Moscow, French centre-half Adil Rami from Valencia and Ghanaian midfielder Michael Essien from Chelsea.
Taarabt is unlikely to make his Milan debut in Saturday's game against Torino.