Douentza had been the outer edge of Islamist rebel control until the militants surged southwards earlier this month. While far from the capital, Douentza is only 120 miles from Mopti, which marks the line of control of Malian forces.
On Monday, French and Malian troops arrived in Douentza to find the Islamists had retreated from the town, a local source said.
Pick-up trucks carrying men entered Douentza last September, and in the months that followed the Islamist extremists forced women to wear veils and enlisted children as young as 12 as soldiers in training.
The news Douentza was in government hands came on the day French and Malian forces again patrolled the streets of Diabaly after nearly a week of Islamist rule.
The presence of Malian soldiers in the two towns is a big accomplishment for the French-led mission, which began on January 11 after the rebels pushed south and seized the central Malian town of Konna. The seizure marked the furthest south the Islamists had ventured since taking control of northern Mali's main cities after a March 2012 coup in Bamako, the capital in Mali's south.
France said there were now 1000 African troops in Mali to take part in the military intervention. French military spokesman Colonel Thierry Burkhard said the soldiers come from Nigeria, Togo, Benin, Niger and Chad.
France said it had 2150 forces in Mali, and it could exceed 2500 at full deployment in the ex-French colony. It has received logistical support from Western allies and intelligence from the US but the French hope that West African soldiers will eventually take the lead alongside Malian troops in securing the country.