The Terriers have paid an undisclosed fee for the highly-rated 21-year-old, who has put pen to paper on a three-year contract.
Town manager Lee Clark said: "Scott has been on our minds all season. He's a player that we have watched more than any other.
"All the reports we have on him are very, very good and when Terry McDermott and I went up to Falkirk to watch him a couple of weeks ago we saw a very good young player.
"The contacts we have up in Scotland, other managers, players and so on, rate Scott as one of the brightest young prospects in Scottish football, so we're delighted to have him on board."
Arfield, born in Livingston, played for local side Murieston as a youngster before joining Falkirk's youth system. He made his debut in the Scottish Premier League in August 2007 and has been a mainstay in Scotland Under-21s European Championship qualifying campaign.
Source: Team Talk
Source: Team Talk