Fowler, who joined the English powerhouse in 2022 on a long-term deal that ran until 2026, has signed a fresh one-year extension.
The young gun's status as one of the best players in the world was highlighted by selection in the PFA Women's Super League Team of the Year, despite her campaign being curtailed by a serious knee injury in April.
The 22-year-old, who is determined to be fit for Australia's Asian Cup campaign on home soil in March, says there "are a few reasons" she agreed to stay in Manchester.
"City has felt like home for me for quite a while now so to continue this journey with them, I'm really proud to do that," Fowler said in a statement.
"Enjoying my football is a big part of me playing well and City has created an environment where I can flourish in that sense.
"I love working with the girls who are here, and I haven't always had that, so I appreciate that.
"As my seasons here have progressed, I've become a lot more comfortable in this environment, and I think I'm the kind of person who plays a lot better when I'm comfortable with the people and coaching staff.
"I feel like I have that now, I have the good relationships with everyone here and that's made me feel like I'm at home and has allowed me to be really comfortable out on the field."
Fowler has played 87 games for City, scoring 21 goals.
Manchester City's director of women's football, Therese Sjogran, described Fowler as "a really important figure for us on and off the pitch".
"We're delighted she's agreed to extend her stay," Sjogran said.
"She's a tremendous talent, but the way she's improved each year since joining City speaks volumes of her attitude and hard work off the pitch."
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