Abu Musab Abd al-Wadud was installed as head of the Salafist Group for Preaching and Combat (GSPC), according to a statement on the group's website on Monday.
Abd al-Wadud replaces Nabil Sahrawi, who was killed by the Algerian army in June.
Beginning in 1992, the rebellion in Algeria has claimed 150,000 lives – but the situation has calmed significantly in recent years.
However, the GSPC is believed to be behind the kidnapping of 32 Europeans trekking in the north African country last year.
Nearly 40 people were killed in July and August bringing the total killed to about 340 since the start of the year in incidents involving armed Islamists in Algeria, according to officials and media accounts.