Monye, who scored his fourth tour try in Port Elizabeth on Tuesday, got the nod for the number 11 shirt ahead of IRB Player of the World Shane Williams of Wales, who has failed to sparkle in South Africa.
Originally considered a certainty for the Test starting line-up, Williams has been hit by poor form, and a stomach bug forced him out of the last pre-Test fixture.
Monye is physically imposing which did his chances no harm with most experts predicting a battle of brawn this weekend when world champions South Africa set about avenging a 2-1 series loss to the Lions 12 years ago.
Jones got the nod to give Wales six starting places while Grand Slam winners Ireland have five and England four for the sell-out match at Absa Stadium in the Indian Ocean city.
There was also considerable speculation over who would partner outstanding number eight Jamie Heaslip of Ireland in the back row and the places went to David Wallace of Ireland and Tom Croft of England.
The other strong contender, flame-haired flanker Martyn Williams of Wales, was chosen among the seven replacements with hooker Matthew Rees, prop Adam Jones and O'Callaghan the other forwards on the bench.
"There were some very difficult calls to make as the players, as a group and individually, have done everything that we have asked of them and performed on the field," said head coach Ian McGeechan.
"The preparation for the first Test has been very positive. It has been a challenge to reach the first Test with an unbeaten record as we have played a variety of provincial teams across the country."
"This challenge is a unique one in the modern rugby calendar in that it comes only in a Lions context these days. The players have to adapt to preparing and playing more frequently. They have answered that challenge.
"It has been 20 years since a Lions team won all its provincial matches leading up to a Test series so it is a very satisfying to be in such a position."
McGeechan masterminded the 1997 defeat of the Boks and is a far more experienced campaigner than rival Peter de Villiers, who took over after Jake White led them to the 2007 Rugby World Cup title in France.
Lee Byrne (WAL); Tommy Bowe (IRL), Brian O'Driscoll (IRL), Jamie Roberts (WAL), Ugo Monye (ENG); Stephen Jones (WAL), Mike Phillips (WAL); Jamie Heaslip (IRL), David Wallace (IRL), Tom Croft (ENG); Paul O'Connell (IRL, capt), Alun-Wyn Jones (WAL); Phil Vickery (ENG), Lee Mears (ENG), Gethin Jenkins (WAL)
Source: AFP European Edition