Inter Milan's 19-year-old striker Balotelli, being courted by Manchester City despite a series of on-and-off the field problems, earns his first call-up alongside Brazil-born forward Amauri.
The inconsistent Juventus striker had the chance of making the Brazil squad last year but hung on to gain Italian citizenship only to be ignored by Marcello Lippi for Italy's World Cup humiliation in June.
In all there are eight new call-ups and only nine players remain from the squad which went to South Africa as defending champions but were dumped out in the group stage without winning a game.
Fabio Cannavaro and Gennaro Gattuso retired from internationals after the debacle and former Fiorentina boss Prandelli has signalled a possible end to the Italy careers of Antonio Di Natale and Gianluca Zambrotta by leaving them out.
Gianluigi Buffon and Andrea Pirlo are not fit so AS Roma's Daniele De Rossi is set to be captain for the game at West Ham United's Upton Park in London despite his club side not having played a competitive game yet this term.
Sampdoria talisman Cassano, who has overcome his bad-boy image in recent seasons, was also overlooked by Lippi for two years but makes his return to the squad having last been involved at Euro 2008.
Italy start their Euro 2012 qualifying campaign in Estonia on Sept. 3 before hosting the Faroe Islands in Florence on September 7.
Squad:
Goalkeepers: Federico Marchetti (Cagliari), Salvatore Sirigu (Palermo), Emiliano Viviano (Bologna)
Defenders: Luca Antonini (AC Milan), Davide Astori (Cagliari), Leonardo Bonucci (Juventus), Mattia Cassani (Palermo), Giorgio Chiellini (Juventus), Stefano Lucchini (Sampdoria), Cristian Molinaro (VfB Stuttgart), Marco Motta (Juventus)
Midfielders: Daniele De Rossi (AS Roma), Andrea Lazzari (Cagliari), Claudio Marchisio (Juventus), Ricardo Montolivo (Fiorentina), Angelo Palombo (Sampdoria), Simone Pepe (Juventus)
Forwards: Amauri (Juventus), Mario Balotelli (Inter Milan), Marco Borriello (AC Milan), Antonio Cassano (Sampdoria), Fabio Quagliarella (Napoli), Giuseppe Rossi (Villarreal).
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