Former Education Secretary Estelle Morris is among 16 new Labour life peers, as the party becomes the largest in the Lords for the first time.
Estelle Morris is among 27 new peers
There are 27 new peers in total including ex-minister Tony Banks and ex-Tory chairman Sir Brian Mawhinney.
The list includes 16 Labour, six Conservative and five Liberal Democrat nominations.
It will not give Labour an overall majority in the Lords but it could ease the passage of legislation.
The government is potentially facing a rough ride in the Lords over plans for ID cards and reform of the public services, both of which are expected to be in next week's Queen's speech.
But Constitutional Affairs Secretary Lord Falconer said the new peers would not change the "basic arithmetic" in the Lords.
"We were two or three behind the Conservatives, now we are two or three ahead," he told BBC News.
"The arithmetic will remain that if the Liberal Democrats and the Conservatives unite against a particular proposal they can defeat it."
The fact that it had taken eight years of Labour government for the party to become the largest in the Lords showed it was "scrupulous" in its appointments to the House of Lords, he added.
Liberal Democrat deputy leader Sir Menzies Campbell said:
"These numbers do not reflect the way the people of the UK voted last week, but they underline Labour's clear intention to clip the wings of the House of Lords.
"Rather than simply playing with the numbers, we need root and branch reform to provide for an almost totally elected upper house."
The peerages announcements come after the government said it wanted to put a limit on the time peers had to discuss legislation.
Ministers deny opposition claims they want to "disable" the Upper House.
The government is expected to announce plans in the Queen's Speech to remove the remaining hereditary peers.
And it will allow MPs a free vote on who should sit in the Lords, including whether at least some peers should be directly elected.
But Tony Blair has warned that a totally elected second chamber could undermine the authority of the House of Commons.
Ms Morris stood down as an MP and junior arts minister at the general election.
She resigned as education secretary in 2002 following the A-level marking fiasco. She recently became pro-vice chancellor of Sunderland University.
Tony Banks, a colourful and often controversial MP, was briefly sports minister in the first Blair government.
Other former Labour ministers to ennobled include ex-Cabinet enforcer Jack Cunningham, former culture secretary Chris Smith, former Defence Minister Lewis Moonie and George Foulkes, former Scottish Office Minister.
Former chairman of the Intelligence and Security Committee, Ann Taylor, has been made a baroness.
Ex-chairman of the foreign affairs committee, Donald Anderson, a staunch defender of much of Tony Blair's foreign policy, has also been admitted to the Upper House.
Clive Soley, former chairman of the parliamentary Labour Party has also been made a baron.
Former Lib Dem MP Jenny Tonge, who stood down at the general election, and Conservative former education secretary Gillian Shephard have been made baronesses.