"Together they will serve as guardians of the American landscape on which the health of our economy and the well-being of our families so heavily depend," Obama said at a news conference in Chicago.
Vilsack was a high-profile supporter of Sen. Hillary Clinton during the presidential primaries after he briefly sought the Democratic presidential nomination.
Vilsack has championed the development of ethanol, an alternative energy, in Iowa — something that coincides with Obama's vision for an energy-independent future, and something he can promote from the Department of Agriculture.
Vilsack, who dropped out of the presidential race in February 2007, is the fourth former presidential rival to join Obama's team.
Vice president-elect Joe Biden; Hillary Clinton, Obama's pick for secretary of state; and Bill Richardson, Obama's pick for secretary of commerce, also sought the Democratic presidential nomination.
"With the appointments I announced earlier in the week, and with those I am announcing today, I am confident that we have the team we need to make the rural agenda America's agenda, to create millions of new green jobs, to free our nation from its dependence on oil and to help preserve this planet for our children," Obama said.
Salazar, Obama's choice for secretary of the interior, has focused on public land and energy resource issues as a first-term senator from Colorado. He is the second Latino to be named to Obama's Cabinet.
Obama said Wednesday he was confident that under Salazar, the Interior Department would become more proactive instead of "sitting back, waiting for whoever has most access in Washington to extract what they want."
Salazar is a member of the Senate Committee on Energy and Natural Resources and has developed a reputation as a strong advocate of reducing the country's dependence on foreign oil.
A fifth-generation Coloradan, Salazar was elected to the Senate in 2004 and quickly made a name for himself in immigration reform.
He was a key member of a bipartisan Senate group that put together the Comprehensive Immigration Reform Act of 2007, which would have beefed up border security and increased the number of Border Patrol agents, but also would have created a guest worker program.
That program would have allowed migrants to work temporarily in the Untied States. The most controversial aspect of the bill was the creation of a pathway to legalization and eventual citizenship for the estimated 12 million illegal immigrants already in the country, an idea that critics dismissed as "amnesty." The bill failed to make it through Congress.
Salazar's appointment would not jeopardize the balance of power in the Senate. Colorado Gov. Bill Ritter, a fellow Democrat, would name his replacement.
Obama on Tuesday nominated Arne Duncan, the head of Chicago Public Schools, as his administration's secretary of education.
"When it comes to school reform, Arne is the most hands-on of hands-on practitioners," Obama said at a news conference at Chicago's Dodge Renaissance Academy, a school that Duncan helped overhaul.
"For Arne, school reform isn't just a theory in a book -- it's the cause of his life. When faced with tough decisions, Arne doesn't blink. He's not beholden to any one ideology, and he doesn't hesitate for one minute to do what needs to be done."
Duncan has headed the Chicago school system -- the third-largest in the nation -- since 2001. Like Obama, he is a graduate of Harvard University.
Obama on Monday announced physicist Steven Chu as his selection for energy secretary, as well as his choices for other energy positions.
Obama called Chu "uniquely suited to be our next secretary of energy" for his work on new and cleaner forms of energy. Chu, who runs the Lawrence Berkeley National Laboratory in California, won the 1997 Nobel Prize in physics and is highly respected in energy circles.There are still two Cabinet posts that have not been filled: labor secretary and transportation secretary. Obama also has not yet announced the CIA director or the national intelligence director.