The 20-year-old has featured in Everton's pre-season friendlies against Tranmere Rovers and Leicester City but joins Blackpool ahead of the opening game of the Championship against Nottingham Forest on Saturday.
Blackpool manager Jose Riga has been trying to bolster his decimated squad in time for the Championship kick-off after starting pre-season with just eight senior players on the club's books.
Lundstram joins recent signings Joe Lewis, who arrived on a season-long loan from Cardiff, and Joan Oriol, who moved from Spanish side Osasuna, at Bloomfield Road.
The midfielder told the club's website: “It’s a good challenge to come into. It’s a Championship club, which is where I want to be playing, so I’m really excited to get started.
“We’ve got the whole season to try and build the team up, and get good relationships with everyone. It obviously won’t come straight away, but with a full season we’ll build relationships and hopefully build towards having a good finish.”
Lundstram, who has had loan spells at Doncaster Rovers, Yeovil Town and Leyton Orient, has not made a senior appearance for Roberto Martinez's Everton side.