With Labor trailing badly in the polls Rudd ruthlessly seized the leadership on Wednesday, ousting the country's first woman prime minister Julia Gillard three years after she had overthrown him.
The Labor Party, which is counting on Rudd's vaunted campaigning skills, has seen an immediate bounce in popularity.
"I am delighted that in this cabinet of ours we will have the largest number of women in any cabinet in Australian history," Rudd said.
Victoria senator Jacinta Collins enters the cabinet as minister for mental health, Catherine King will be minister for regional Australia and Julie Collins takes the portfolios of housing, homeless and the status of women.
They join finance minister Penny Wong, health minister Tanya Plibersek and families minister Jenny Macklin in the 20-member cabinet.
The total number of women ministers rises from nine out of 30 under Gillard to 11.
West Australian MP Melissa Parke was also appointed as the country's first minister for international development, a non-cabinet job.
Rudd said the appointments were made purely on merit, not gender, and pledged to boost the economy, but made no mention of an election date.
"The core task of this Australian government is to keep the economy strong," he said.
Rudd pledged to work for a "stronger, fairer Australia ... and never ever, ever allow the fair-go to be thrown out the backdoor."
The top jobs of foreign affairs, defence and the home ministry did not change hands.
New Deputy Prime Minister Anthony Albanese will take over the communications portfolio and responsibility for the rollout of the Aus$35.9 billion ($32.8 billion) high speed National Broadband Network. He keeps his transport and infrastructure portfolios.
Tony Burke was shifted from environment to the politically explosive immigration role.
Bill Shorten, who dumped Gillard and backed Rudd at the last minute during the leadership tussle, added school education to his workplace relations portfolio .
Rudd brought key allies Joel Fitzgibbon and Kim Carr back to the front bench as agriculture minister and industry and innovation minister respectively.
Despite the increase in female ministers, analysts noted men would likely dominate the big issues with Gillard gone.
"A more objective analysis... paying attention to the jobs allocated, reveals it will be a close coterie of men who will be running the big arguments, and handling the major problem areas between now and polling day," said ABC television's chief political correspondent Mark Kenny.
Governor-General Quentin Bryce swore in the ministers Monday afternoon before a first cabinet meeting in Canberra.
Opinion polls suggest Labor has dramatically closed the gap on the conservative Liberal-led opposition, which today has just two women shadow cabinet members.
A Galaxy poll published Sunday by News Limited put the Liberals ahead with 51 percent against 49 percent in a race between the two major parties.
The survey of 1,002 voters also revealed that 51 percent of those polled believe Rudd would make a better prime minister than opposition leader Tony Abbott (34 percent). Fifteen percent were uncommitted.
Rudd's failure to fix a new election date after he last week ruled out Gillard's choice of September 14 has angered the opposition.
"It is incumbent on the prime minister to end the uncertainty and name the date," Abbott said.
"I suspect that despite the advice he is getting he wants to keep this parliament going on and on and on."
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