In the most headline-catching appointment, Ehud Olmert named Tzipi Livni as only the second woman in Israel's history to be foreign minister.
Three other allies of Sharon were brought into the cabinet.
The vacancies arose after four members of Sharon and Olmert's old right-wing Likud party, including Silvan Shalom, the foreign minister, submitted their resignations from the ruling coalition last week.
The new-look team will remain in place only until a 28 March general election. It does not need the approval of parliament, which is in recess until the country goes to the polls.
Olmert said: "Our intention is to efficiently continue the work of government in all ministries."
Israeli cabinets usually feature about 20 ministers but the size has shrunk in recent months following the departure of the centre-left Labour and then Likud, leaving Sharon's new Kadima party as the only one still in government.
Despite Sharon's hospitalisation and the growing acceptance he will never return to office, polls show that Kadima is still on course to emerge as the largest party at the general election.
Sharon was placed in a coma as part of efforts to treat his brain haemorrhage but he has still to regain consciousness.
A statement from Jerusalem's Hadassah hospital said Sharon remained in a serious but stable condition after doctors successfully changed a respiratory tube overnight that had been inserted during a recent tracheotomy.
Olmert has been treading carefully since stepping into Sharon's shoes, but has been gradually making his imprint on both domestic and diplomatic issues.
On Tuesday he voiced his intention to resume negotiations with Mahmoud Abbas, the Palestinian president, if he is confirmed as prime minister after 28 March and the Palestinians' own elections next Wednesday.
Abbas, snubbed by Sharon since June last year, responded by saying he wanted talks to resume immediately.
"The only way that we can forge peace is through negotiations and not through killings, assassinations, attacks and unilateral measures," he said.
Livni launched her tenure at the foreign ministry with a withering attack on Abbas's Palestinian Authority for allowing the Islamist resistance movement Hamas - responsible for the majority of attacks during the five-year uprising - to run in next week's parliamentary elections.
Tzipi Livni verbally attacked
Palestinian group Hamas
"Can you imagine any European country or the United States allowing a terrorist organisation to take part in elections?" she asked.
The build-up to the election has taken place against a security crisis in the Gaza Strip that has seen armed men loyal to Abbas's own Fatah faction take over offices of the central election commission.
However, Abbas insisted he had no fears about voters or the election organisers being intimidated on the day of the vote and said no one with weapons would be allowed anywhere near the polling booths.
"They will be conducted in a democratic and honest fashion and we will add to the Palestinian democracy that we have promised our people," Abbas said.
Meanwhile Olmert also sought to lay down the law by ordering the army to evict dozens of Jewish hardliners occupying a Palestinian marketplace in the West Bank city of Hebron.
Following weekend riots, Israel security forces dragged some supporters of the settlers out of a market in the centre of Hebron on Tuesday but dozens of others still remain and the settlers themselves show little sign of moving.
Olmert expressed fears that the culture of defying the law was in danger of spreading as he held consultations with security officials and Livni, who is also justice minister.
"We are fighting for the rule of law. It is an essential objective," the acting prime minister said.