Fifty-nine-year-old Lee has pledged to work for a just and fair society, saying though Singapore would be open to the world, yet Singaporeans would come first.
He said the government would review the past policies to suit the demands of its citizens.
K Shanmugam, 52, is the new foreign minister and minister of law, S Iswaran, 48, is minister of the prime minister's office and second minister of home affairs as well as trade and industry. Vivian Balakrishnan, 50, is the minister for environment and water resources.
Ranked third in the cabinet is Tharman Shanmugaratnam, 54, who takes on the deputy prime minister portfolio as one of the two DPMs, as well as minister of finance and manpower with additional responsibility of monetary authority of Singapore, the de facto central bank.
The prime minister has also appointed 10 ministers of state.
Lee had earlier spelt out his cabinet priority, saying it would engage a younger generation of Singaporeans even as it sets about the task of bringing the country forward in a more complex environment.
Lee's ruling People's Action Party (PAP) lost nearly 40 per cent of the votes at the general election two weeks ago as Singaporeans voted for opposition citing grievances related to jobs, influx of foreign workers at lower wages, high costs of housing and congested transportation system.
For the first time, the government is formed without Lee Kuan Yew, who had been the prime minister since independence till 1990.
Lee Kuan Yew, 87, has been the architect of modern Singapore, rated among the best Asian commerce, finance and trading hub.
Prime Minister Lee has heard the Singaporeans' concerns, and brought in people who might bring fresh perspective to old problems, said Halimah Yacob, who was sworn in as minister of state for community development, youth and sports.
Lee has selected ministers below the age of 60 years.
About 700 people including former members of parliament, students, social workers, unionists, doctors, nurses, teachers, businessmen and soldiers attended the swearing in ceremony, telecast live on local television.
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