Dixon, 28, is averaging 8.9 points, 1.5 rebounds, 1.4 assists and 22.6 minutes in 51 games this season, his fifth in the NBA.
A reliable three-point shooter, he has connected on 36.4 per cent of his field-goal attempts from beyond the arc.
"Juan has proven he belongs in this league," Raptors president and general manager Bryan Colangelo said. "And we will see how he affects our team.
"We will see if he is a factor in our plans. But we certainly look forward to giving him every opportunity to break into the rotation and see where it takes us."
No one in Portland was surprised that Dixon was traded, as his name had been floating around in trade rumors leading up to the trade deadline. The only suspense over the past week was where his destination would be:
In his third year in Portland Dixon has seen his minutes drop (22 from 25 last year) and his starts minimized (started 42 games last season and only 1 thus far) all while averaging 9 points per game as a backup to Brandon Roy who is the new proprietor in the Blazers backcourt. The writing was on the wall from the start of the season. And knowing what a true professional Dixon is, he embraced his role of Nate McMillan's bench for the betterment of the team.