Phelan, 23, had not played an MLS match for Toronto, which drafted him with the 10th overall pick in the 2008 SuperDraft. He did play in three reserve matches yet despite TFC releasing defender Andrew Boyens earlier this year, its acquisitions of players in other positions and other pending roster moves prompted the trade.
In exchange for Phelan, TFC receives an international roster slot through the 2010 season. Starting with this season, each MLS team is allotted eight international slots, which can be used in trades.
"We are pleased to be able to add Pat to our squad," Revolution director of soccer Michael Burns said. "We followed his career closely at Wake Forest and we're looking forward to him joining us."
Phelan joins former Wake Forest teammates Wells Thompson and Michael Parkurst on the Revs. He earned first team all-American honors and helped the Demon Deacons win the 2007 NCAA Division I title. He was the Gatorade National High School Player of the Year in 2003 and has played for the U.S. at several youth levels.