Faletau, who did not feature in any warm-up fixtures, forms Wales' back row with captain Jac Morgan and Aaron Wainwright.
Will Rowlands and Adam Beard are the lock pairing and props Gareth Thomas and Tomas Francis make up the front row with hooker Ryan Elias, who has also overcome injury to play.
Dan Biggar leads the backline from fly-half with Gareth Davies at number nine.
Nick Tompkins and George North, playing in his fourth World Cup, are the centre pairing and Josh Adams and Louis Rees-Zammit are on the wing. Liam Williams is at full-back.
Co-captain Dewi Lake was not considered for this game having only just returned to full fitness.
"He's not had as much training under his belt as the other hookers since he picked up that knock to his knee so Ryan Elias and Elliot Dee are selected for us for this game," Gatland said.
"We've had some good clarity about what we want to achieve and the way we want to play on the weekend. It's going to be an exciting contest on Sunday and one that we are relishing."
Gatland added that there was a quiet confidence in the squad after a difficult few seasons and the retirement of several leading players.
"The boys are looking sharp. There's a great environment in this group - players working for each other, enjoying each other's company. We're in a good place and can't wait to get out there."
He warned that Fiji, who enjoyed their first-ever win over England when they won at Twickenham in their final warm-up fixture, will present a big challenge.
"Fiji are a good side with some great individual athletes and they play with a lot more structure now than maybe they have done traditionally," he said.
Wales team:
1 Gareth Thomas, 2 Ryan Elias, 3 Tomas Francis, 4 Will Rowlands, 6 Aaron Wainwright, 7 Jac Morgan (c), 8 Taulupe Faletau; 9 Gareth Davies, 10 Dan Biggar, 11 Josh Adams, 12 Nick Tompkins, 13 George North, 14 Louis Rees-Zammit, 15 Liam Williams
Replacements: 16 Elliot Dee, 17 Corey Domachowski, 18 Dillon Lewis, 19 Dafydd Jenkins, 20 Tommy Reffell, 21 Tomos Williams, 22 Sam Costelow, 23 Rio Dyer
