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The 20-year-old, who can play as an attacking midfielder or forward, joins from Mexican side Chivas Guadalajara.
Davila has signed a five-year contract after impressing at the Under-20 World Cup in Colombia, where he helped Mexico to third place.
Chelsea's technical director Michael Emenalo told the club's official website: "Ulises has been a highly scouted player by a lot of clubs."
The Blues have already recruited youngsters Juan Mata, Oriol Romeu, Romelu Lukaku and Thibaut Courtois in 2011.
Davila has come through the Chivas youth system, which has launched the careers of Manchester United's Javier Hernandez, Arsenal's Carlos Vela and former Fulham defender Carlos Salcido.
Emenalo added: "[He] has made great progress in the last couple of tournaments we have seen him play in.
"We are delighted to have been able to get this deal done, Chivas is a superb club with a strong reputation in player development and world football.
"And we are confident Ulises will be able to continue his fast development to become an important Chelsea first-team player."
Chelsea chief executive Ron Gourlay said: "We have been very impressed with the Chivas organisation and we will look for other ways to work with them in the future."
LikaStick wrote:jeez torres...that really hurt....![]()
Lucian-2nr wrote:Im in the mood to ban....
Cjruckus wrote:Lucian-2nr wrote:Im in the mood to ban....
well ban torres from playing.
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