Prayuth and 35 cabinet ministers pledged their loyalty to the monarchy at the Dusit Palace.
"I hope the cabinet and the government will have encouragement and power to perform their duty well and do what is right," King Vajiralongkorn said.
Former junta chief Prayuth has said the coup was necessary to restore order after six months of street protests and violent clashes when he seized power in 2014. He said on Monday that things were getting back to normal after the March 24 election.
"We have to prepare for the next task that is to present the government policies and create a sense of unity for the country, religion, king, and all of us, the people," Prayuth told reporters after Tuesday's ceremony.
"Many people have high hope for this government."
Prayuth stays on as prime minister after being chosen by junta-appointed senate and pro-military legislators under a system that his opponents said was unfair.
It took Prayuth more than a hundred days to form the cabinet following heated wrangling.
The most important jobs went to members of the former junta, but some key economic portfolios went to the 19 parties Prayuth had to bring on board to give him a slim majority in the lower house of parliament.
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