Moustakas had asked for $3.1 million in his arbitration filing, while the Royals countered with $1.85 million.
Moustakas, 26, hit 15 homers last season with a .632 OPS. But he had a huge October, hitting a franchise-record five home runs in the postseason. He also posted a .558 slugging percentage in the postseason, and the Royals believe that should be a catalyst for Moustakas.
"Mike is an important part of our ballclub," Royals general manager Dayton Moore told MLB.com by phone. "What he was able to accomplish in October should give him the confidence he needs to not only succeed in 2015 but succeed for the rest of his career.
"He is a very talented player, and that is why we have stayed committed to him. We need his production and contributions to help us win games."
Moustakas is just a .236 career hitter, but he has excelled defensively since being brought up to the big leagues in 2011.
"And while he has had his struggles like everyone else does," Moore said, "he never let his offense affect his defense. He does something every game to help us win."
Moustakas' biggest hurdle in 2014 was hitting against the shift, which he'll likely see again in '15.
"We're confident he'll make the necessary adjustments," Moore said.
Jeffrey Flanagan is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.