Following are profiles of people chosen for key posts:
FINANCE MINISTER, FINANCIAL SERVICES MINISTER: SHOICHI NAKAGAWA
Mr Nakagawa, 55, who has held the trade and agriculture portfolios, has courted controversy in the past.
In 2006, he cause an uproar by saying Japan - the only country to have been hit by atomic bombs - should debate whether to acquire nuclear weapons, after nuclear and missile test launches by North Korea.
An outspoken critic of China, Mr Nakagawa once likened Beijing to a 'thief' stealing a wallet in a dispute over maritime energy resources and warned that China's growing military capabilities could result in Japan becoming just another Chinese province in the future.
As trade minister from 2003, he oversaw Japan's push for free trade agreements despite worries from Japan's long-protected farm sector.
A graduate of the prestigious University of Tokyo, he worked briefly in a large bank before entering politics after the death of his father, an LDP heavyweight.
ECONOMICS MINISTER: KAORU YOSANO
Mr Yosano, a veteran politician, is keeping his position as economics minister.
He placed a distant second to Mr Aso in the ruling party leadership race, calling for a higher consumption tax rate to help fund bulging social security costs for Japan's rapidly ageing society.
A fiscal conservative, Yosano, 70, places priority on fixing battered public finances and has said Japan should stick to its goal of balancing the budget by 2012 despite recent weakness in the economy.
The grandson of two well-known poets and a graduate of the prestigious University of Tokyo, Yosano started his political career in 1968 by joining the office of Mr Yasuhiro Nakasone, who was prime minister in the 1980s.
FOREIGN MINISTER: HIROFUMI NAKASONE
The 62-year-old is a son of one of Japan's best known leaders, Yasuhiro Nakasone, and a four-term upper house lawmaker.
He has served as education minister and worked for a chemicals company for 15 years before becoming secretary to his father.
Mr Nakasone is currently a member of a Japan-South Korea parliamentarians' group. He was the first education minister to make an official visit to South Korea after World War Two.
South Korea often criticises Japan of whitewashing its wartime history in school textbooks.
DEFENCE MINISTER: YASUKAZU HAMADA
Mr Hamada, 52, is a son of outspoken former LDP lawmaker Koichi Hamada. A five-term lower house member, Hamada served as deputy secretary for defence.
Mr Hamada is a member of a rock band consisting of lawmakers, which sings about political issues such as education and international cooperation.
FARM MINISTER: SHIGERU ISHIBA
Having served two terms as defence minister, Mr Ishiba, 51, is best known for what media call a 'geeky' knowledge of security issues and military hardware and has written several books on defence.
He ran against Mr Aso in the leadership race, arguing for the renewal of the legal mandate for marine refuelling in the Indian Ocean in support of US-led military operations in Afghanistan.
A Christian, Mr Ishiba has said Japan has a responsibility to take an active role in maintaining security in the Middle East, because it imports 90 per cent of its oil from the region.
INTERNAL AFFAIRS MINISTER: KUNIO HATOYAMA
Mr Hatoyama is a grandson of a former prime minister and brother of main opposition Democratic Party Secretary-General Yukio Hatoyama.
The 60-year-old lawmaker has had a complex political career. He left the LDP in 1994, served briefly in an anti-LDP government, and took part in the formation of the precursor to the current Democratic Party before returning to the LDP in 2000.
Controversy dogged Mr Hatoyama during his stint as justice minister under former prime minister Shinzo Abe and in outgoing premier Yasuo Fukuda's first cabinet.
He was rebuked by the top government spokesman for saying a 'friend of a friend' was a member of Al-Qaeda who had entered the country on various passports, and was referred to as the 'Grim Reaper' in a newspaper column for approving a record number of executions.
CHIEF CABINET SECRETARY: TAKEO KAWAMURA
Mr Kawamura, 65, is a former education minister and is said to be well-versed in educational policies.
A six-term lower house lawmaker, Kawamura worked at an oil company before entering the politics and is seen as close to Aso through working with him on educational and sports policies.
MINISTER IN CHARGE OF ADMINISTRATIVE REFORM: AKIRA AMARI
Mr Amari has served three times as trade minister, playing a key role in talks with China on a feud over energy resources in the East China Sea.
A former Sony employee, the 59-year-old is seen as a leading parliament member well-acquainted with commerce and industry groups. He won his first cabinet portfolio in 1998, serving as labour minister.
MINISTER IN CHARGE OF POLICIES TO BOOST BIRTH RATE: YUKO OBUCHI
Ms Obuchi, the 34-year-old daughter of the late prime minister Keizo Obuchi, is the youngest person to be appointed to the Cabinet since World War Two, media reports say.
She worked as an assistant director for a broadcaster before becoming secretary to her father after he became leader.
Known for her outgoing personality, she took over her father's constituency after he died in 2000, winning the election by a landslide.
The mother of a one-year-old boy, Ms Obuchi is said to be keen on education policy and once served as parliamentary secretary at the education ministry.
TRANSPORT MINISTER: NARIAKI NAKAYAMA
A former education minister, 65-year-old Nakayama is a staunch nationalist and heads a group of LDP lawmakers that declared the 1937 Nanjing Massacre a fabrication.
China says Japanese troops killed 300,000 people in what was then the capital, while an Allied tribunal put the death toll at about 142,000.
He is a former finance ministry bureaucrat who has worked for the World Bank as well. He is married to Ms Kyoko Nakayama, who was the minister in charge of issues related to the abduction of Japanese citizens by North Korea in the 1970s and 1980s, on abduction issues in Fukuda's second cabinet.
A feud over the kidnappings is a key obstacle to normalising ties with Pyongyang.
Others in the new cabinet include: Mr Eisuke Mori, who will serve as Justice Minister, and Mr Ryu Shionoya, who will serve as Education Minister. -- REUTERS