The 23-year-old, who was out of contract, is manager Paul Cox's ninth signing of the summer.
Hughes was a target for Cox in January, when he was at Cambridge United, but Barrow were unable to sign him either on loan or permanently.
He moved to Scotland in February and played 11 games for Inverness, nine of them in the Scottish Premiership.
But he only started five games and leaves Caley Thistle after the exit of manager John Hughes, who has been succeeded by Richie Foran, making the step up from club captain.
Hughes scored Cambridge United's opening goal when they beat Gateshead 2-1 to win the Conference play-off final at Wembley in 2014 and was part of the U's side that also won the FA Trophy that year.
National League club Barrow have signed midfielder Liam Hughes from Scottish outfit Inverness Caledonian Thistle.