Andy Burnham has kept Douglas Alexander in post as Scottish Secretary, resisting speculation that he was in line for a move to the Treasury or the Foreign Office.
Mr Alexander's hopes of promotion had been dented by his role as co-chair of Scottish Labour's Holyrood campaign, which delivered the party's worst result since devolution began.
His survival came on a day of dramatic upheaval in Westminster, as the new Prime Minister tore through Sir Keir Starmer's top team within hours of entering Downing Street.
In a move that blindsided Whitehall, Mr Burnham's first appointment was John Healey as Chancellor, replacing Rachel Reeves, who left government after turning down another post.
Mr Healey, the former defence secretary, had quit Sir Keir's government in June over the Treasury's refusal to fund the £28 billion defence chiefs say is needed to meet Nato spending targets.
The new Chancellor was asked by broadcasters on Monday night if welfare cuts or new taxes could be introduced to meet the target of spending 3% of GDP on defence by 2030.
He replied: "Fiscal control is the first duty of any Chancellor. It is mine. And fiscal credibility is the bedrock for economic stability and for national security.
"You heard the Prime Minister this afternoon say, in this more dangerous world, we will meet our commitments on defence to our international allies."
Ed Miliband moves to Foreign Secretary, taking over from Yvette Cooper, who becomes Health Secretary. Shabana Mahmood stays on as Home Secretary, despite both she and Mr Miliband having been tipped as favourites for the Chancellor job.
Former Health Secretary Wes Streeting becomes Defence Secretary. He succeeds Dan Jarvis, who was in the role for less than six weeks.
Other major figures in Sir Keir's government sacked by Mr Burnham included Deputy Prime Minister David Lammy, Chief Secretary Darren Jones, Business Secretary Peter Kyle, Attorney General Lord Hermer, Technology Secretary Liz Kendall, Welsh Secretary Jo Stevens, Northern Ireland Secretary Hilary Benn, Paymaster General Nick Thomas-Symonds and Development Minister Baroness Chapman.
Starmer loyalist Steve Reed, who lost his cabinet role at the housing ministry, told Mr Burnham: "I hope those who did not show loyalty to Keir will now show it to you."
Louise Haigh, seen as one of Mr Burnham's closest allies, was brought back into government as First Secretary of State and Chancellor of the Duchy of Lancaster, running what is being billed as a beefed-up Cabinet Office acting as the "political engine room" of the new administration.
She served as transport secretary in Sir Keir's cabinet but was forced to quit after just four months when it emerged she had pleaded guilty to a fraud offence during her twenties.
Former Deputy Prime Minister Angela Rayner has also returned to government and has been appointed Housing Secretary.
She left government last September after admitting she had underpaid roughly £40,000 in stamp duty on an £800,000 flat in Hove, tied to a family trust arrangement for one of her sons.
An ethics adviser found she had breached the ministerial code by not seeking further specialist tax advice.
Meanwhile, Pat McFadden stays on at the Department for Work and Pensions. Bridget Phillipson will remain a member of cabinet as Minister for Women and Equalities but is no longer Education Secretary.
Lucy Powell will take over that post.
Jonathan Reynolds has been appointed Secretary of State for the new Business, Innovation, Science and Trade department.
Miatta Fahnbulleh will replace Ed Miliband as Energy and Net Zero Secretary. She had previously served as minister for devolution but resigned in May, calling for Sir Keir's departure after the poor election results.
One of her first tasks in the post will concern the Rosebank and Jackdaw projects.
Anneliese Midgley has been appointed as Chief Whip, Downing Street said.
Mr Burnham used his first speech in Downing Street to promise a "circuit breaker" moment for the country, pledging to reverse what he described as the damage done by the Thatcher governments of the 1980s.
He said: "In the 1980s Britain took some wrong turns. Political power was centralised, economic power privatised, large parts of the country deindustrialised, and they still haven't recovered."
He promised a ten-year plan for the country later this year, alongside more immediate measures on the cost of living to be set out from Tuesday, and said his first instruction as Prime Minister would be to end long-term rough sleeping.
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