Amber Rudd has been appointed Work and Pensions Secretary.
Rudd’s return to government comes as Theresa May seeks to bolster her position following the backlash to her draft Brexit deal on Thursday.
She replaces Esther McVey who resigned in protest, saying the agreement “does not honour the result of the referendum”.
Shortly after the announcement, Stephen Barclay was appointed as the new Brexit Secretary, replacing Dominic Raab, who also resigned on Thursday.
The reshuffle came just hours after Michael Gove offered the PM a lifeline by staying on in his Cabinet role as Environment Secretary.
She has suffered the loss of four ministers and faces continued speculation that a vote of no confidence in her leadership could be triggered by Tory MPs within days.
Diane Abbott criticised the appointment of Rudd back to a Cabinet post so soon after the Windrush scandal.
Writing on Twitter the shadow home secretary said: “Amber Rudd resigned because of her mismanagement of #Windrush scandal. Now Theresa May puts her in the DWP.
“Let’s hope she shows more concern for the victims of this department’s unfairness and cruelty than she did at the Home Office. #UniversalCredit”
Rudd she was forced to quit as Home Secretary in April at the height of the Windrush scandal, after admitting she “inadvertently misled” MPs over targets for deporting illegal immigrants.
An internal report leaked this month said she was “not supported as she should have been” by officials, leading her to telling Parliamentary colleagues that the department did not use targets for deporting illegal immigrants.
It said that due to a series of confused email exchanges and crossed wires, Rudd was given the wrong information before, during and after the crucial committee hearing that cost her her job.
Hinting at how she may approach her new role, Rudd instructed photographers summoned to the DWP for a photocall on Friday that there would be “no Tory man spread” – a reference to the striking pose adopted by many senior Conservatives in photographs.