The Heat announced the signing on Wednesday night but did not disclose terms of the deal.
"Caleb is a multi-position player with tremendous energy that had a career year with us," Heat president Pat Riley said in a statement. "He works hard and deserves this as much as any young player in the league. We are extremely happy he has decided to come back."
A restricted free agent, Martin broke out last season for Miami, providing a solid rotation option on the wing to an injury-plagued Heat team.
After playing his first two seasons alongside his twin brother Cody in Charlotte, Caleb signed a two-way deal with Miami and went on to average a career high 22.9 minutes per game. He scored 9.2 points per game while shooting 50.7% from the field and 41.3% from 3-point range.
Martin, 26, started 12 games last season -- mostly as a replacement for the injured Jimmy Butler -- and his all-around offensive game and strong defense helped the Heat stay afloat without one of their stars.
The Athletic first reported Martin's deal Wednesday.