He will now be Morocco's new foreign minister.
The previous foreign minister differed with the palace on certain issues, including the coup in Egypt, which King Mohammed VI and his allies in the Gulf supported but Morocco's Islamists did not.
The PJD, as the Islamists are known, have similar views on the economy, but having a party close to the palace in the government is expected to tarnish the Islamists' reformist credentials.
"The PJD won the 2011 elections because they offered an alternative to a (pro-palace) alliance of eight parties led by Mezouar, and now he's part of the same government and that will doubtlessly hurt the PJD's credibility," said Ahmed El Bouz, a political analyst.
The Cabinet, which has grown from 31 to 39 positions, includes six women, a major increase over just one in the previous government.
Technocrats also have taken over key positions that once were held by party members. Rachid Belmokhtar is now minister of the economy and Mohammed Hassad is interior minister.
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Associated Press reporter Smail Bellaoualli contributed to this report.