The Leicester and England flanker was hurt during training earlier this week, and stayed behind in Christchurch for treatment while his colleagues travelled to Wellington.
But he has made sufficient progress to satisfy the Lions medical staff, and he lines up in the back-row alongside Welsh pair Martyn Williams and Ryan Jones, who makes his tour bow after flying out to replace injured Scotsman Simon Taylor.
There is a place on the bench, meanwhile, for prop Andrew Sheridan, having shrugged off an ankle problem sustained during last Saturday's defeat to New Zealand Maori.
Lions coach Sir Clive Woodward is edging closer towards decision day in terms of finalising his Test line-up to face the All Blacks in Christchurch on Saturday week.
And among those looking to impress at Carisbrook will be Charlie Hodgson and Chris Cusiter, who are reunited at half-back following their impressive contribution in helping the Lions defeat Taranaki.
The Lions will be captained by Scotland hooker Gordon Bulloch, who follows Brian O'Driscoll and Martin Corry in leading the tourists on their 11-match trip.
British & Irish Lions team to play Otago in Dunedin on Saturday:
G Murphy (Leicester and Ireland); D Hickie (Leinster and Ireland), W Greenwood (Harlequins and England), G D'Arcy (Leinster and Ireland), S Williams (Neath-Swansea Ospreys and Wales); C Hodgson (Sale Sharks and England), C Cusiter (Borders and Scotland); G Rowntree (Leicester and England), G Bulloch (Glasgow and Scotland, capt), M Stevens (Bath and England), S Shaw (Wasps and England), D O'Callaghan (Munster and Ireland), L Moody (Leicester and England), M Williams (Cardiff Blues and Wales), R Jones (Neath-Swansea Ospreys and Wales).
Replacements: S Thompson (Northampton and England), A Sheridan (Sale Sharks and England), D Grewcock (Bath and England), S Easterby (Llanelli Scarlets and Ireland), M Dawson (Wasps and England), O Smith (Leicester and England), R O'Gara (Munster and Ireland).