The 21-year-old former Liverpool player has signed a new three-and-a-half-year contract with the club.
Mackay-Steven said: “I am delighted with my recent form but I also know that I have plenty to learn in the game. I see Tannadice as the ideal place to do that right now.”
Manager Peter Houston added: “Ever since we got him match fit, he has progressed gradually each game and he is now very much part of our first team squad.
“His commitment in wanting to ply his trade here at Dundee United was obvious from the start and, although he still has a lot to learn in the game, I have no doubt that if he continues to progress, he will have a massive future in the game.
“It was important that we honoured the commitment Gary showed in coming to Tannadice and it is a great delight to have secured him for at least a further three-and-a-half years.”
