Cal Crutchlow will stay on at Tech 3 Yamaha for the 2013 MotoGP season, joined by Moto2 graduate Bradley Smith.
Smith's deal to move up from Tech 3's Moto2 team to the MotoGP squad for 2013 and '14 was announced at the end of last year, though there were subsequently some doubts over whether it would go ahead.
Crutchlow had been linked with a factory Ducati ride - which eventually went to his current Tech 3 team-mate Andrea Dovizioso - but has now signed a one-year extension with his current squad.
"Together we have made huge progress this season and achieved some strong results and I am confident we can be even more competitive in 2013," said Crutchlow.
"Yamaha and [sponsor] Monster have been very loyal to me over a long period of time and they both made it clear how much they wanted to keep me for next year. That was incredibly flattering and I really appreciate their support."
The 26-year-old Briton is fifth in the MotoGP points at present, though he is still chasing his first podium in the series.
"Hopefully I can reward their loyalty by challenging for the podium throughout 2013, which I know we are capable of," Crutchlow said.
Smith, 21, is in his second year of Moto2 with Tech 3 and is seventh in the standings, which is where he finished the 2011 campaign.
"I have dreamed about being a MotoGP rider for as long as I can remember and to get this chance with such a professional and successful team is fantastic," said Smith.
"It is clear from the results achieved by Cal and Andrea in 2012 that together Tech 3, Yamaha and Monster is a very competitive package and I can't wait to begin this new adventure in my career."
Team boss Herve Poncharal is confident his all-British line-up will deliver in 2013.
"Cal has done an amazing job this season and I am convinced that he is only going to continue to improve," said Poncharal.
"He is a fast rider but also a big personality and we were determined to keep him with us for next season.
"We know there was a lot of interest in him, so for us to capture his signature is a big positive.
"Bradley has demonstrated his high potential in Moto2 and I have every confidence in him that he will be competitive in MotoGP.
"Of course he faces a very difficult challenge because the level now in MotoGP is incredible. But he has a great attitude and a big desire to make this new chapter in his career a successful one."