Harrell replaces Kliff Kingsbury, who briefly held the coordinator post at USC before leaving to become head coach of the NFL's Arizona Cardinals.
The 33-year-old Harrell also followed Kingsbury as a record-setting quarterback for Texas Tech and developed his coaching style in the Air Raid offense popularized by Mike Leach, who coached both Harrell and Kingsbury with the Red Raiders.
Harrell spent the past three seasons as offensive coordinator and quarterbacks coach at North Texas, which won nine games in each of the past two seasons and produced dynamic offenses behind quarterback Mason Fine. He previously spent two seasons as outside receivers coach for Leach at Washington State.
"We wanted someone who could take our offense to new heights and whose system fit our current personnel,'' USC coach Clay Helton said. "An individual who knows both the pass and run games and is an aggressive play-caller on game day. Also someone who is a great teacher and who can develop quarterbacks to their full potential. We have found all these characteristics in Graham.''
After Kingsbury's surprise departure, Helton considered a variety of candidates, including several from the NFL ranks.
Los Angeles Rams senior offensive assistant Jedd Fisch, a former college coordinator at UCLA and other spots, was among those Helton considered, according to sources. Harrell also was in the mix for the coordinator vacancy at Oklahoma State, which hired Princeton's Sean Gleeson for the role Sunday. North Carolina also targeted him for its coordinator vacancy, which ultimately went to Ole Miss' Phil Longo, sources said.