The country's powerful Muslim opposition, which had demanded the dismissal of Prime Minister Samir Rifai in several nationwide protests inspired by those in Tunisia and Egypt, said the changes didn't go far enough.
Rifai, 45, who has been widely blamed for a rise in fuel and food prices and slow-moving political reforms, tendered his resignation early Tuesday to the king, who accepted it immediately, a Royal Palace statement said.
Abdullah named Marouf al-Bakhit, 63, as Rifai's replacement. Al-Bakhit, an ex-general who supports strong ties with the U.S. and Jordan's peace treaty with Israel, previously served as prime minister from 2005-2007.
Abdullah ordered al-Bakhit to "undertake quick and tangible steps for real political reforms, which reflect our vision for comprehensive modernization and development in Jordan."
"Economic reform is a necessity to provide a better life for our people," the king said in the statement. "But we won't be able to attain that without real political reforms, which must increase popular participation in the decision-making."
Abdullah also demanded an "immediate revision of laws governing politics and public freedoms," including legislation governing political parties, public meetings and elections.
Jordan's most powerful opposition group, the Muslim Brotherhood, dismissed the changes as cosmetic.
"We reject the new prime minister and we will continue our protests until our demands are met," said Hamza Mansour, leader of the Islamic Action Front, the Brotherhood's political arm.
Mansour repeated his call for constitutional amendments to curb the king's power in naming prime ministers, arguing that the post should go to the elected leader of the parliamentary majority.
Jordan's constitution gives the king the exclusive powers to appoint prime ministers, dismiss parliament and rule by decree.
"Unlike Egypt, we don't want a regime change in Jordan and we recognize the Hashemites' rule in Jordan," he said, referring to Jordan's ruling family. "But we want to see real political reforms introduced."
When he ascended to the throne in 1999, King Abdullah vowed to press ahead with political reforms initiated by his late father, King Hussein. Those reforms paved the way for the first parliamentary election in 1989 after a 22-year gap, the revival of a multiparty system and the suspension of martial law, which had been in effect since the 1948 Arab-Israeli war.
But little has been done since then. Although laws were enacted to ensure greater press freedom, journalists are still routinely prosecuted for expressing their opinion or for comments considered slanderous of the king and the royal family.
Some gains been made in women's rights, but many say they have not gone far enough. Abdullah has pressed for stiffer penalties for perpetrators of "honor killings," but courts often hand down lenient sentences.
Still, Jordan's human rights record is generally considered a notch above that of Tunisia and Egypt. Although some critics of the king are prosecuted, they frequently are pardoned and some are even rewarded with government posts.
It was not immediately clear when al-Bakhit will name his Cabinet.
A government official said al-Bakhit was consulting with lawmakers, opposition groups, unionists and civil society institutions on the makeup of his Cabinet.
The official, who is involved in the consultations, said al-Bakhit may name some opposition leaders in the new government. He declined to say whether al-Bakhit may approach the Muslim Brotherhood and insisted on anonymity because he is not allowed to brief the media.
Al-Bakhit is a moderate politician, who served as Jordan's ambassador to Israel earlier this decade.
Like Abdullah, he supports close ties with Israel under a peace treaty signed in 1994 and strong relations with the United States, Jordan's largest aid donor and longtime ally.
In 2005, Abdullah named al-Bakhit as his prime minister days after a triple bombing on Amman hotels claimed by the al Qaeda in Iraq leader, Jordanian-born Abu Musab al-Zarqawi.
During his 2005-2007 tenure, al-Bakhit an ex-army major general and top intelligence adviser was credited with maintaining security and stability following the attack, which killed 60 people and labeled as the worst in Jordan's modern history.