James, 41, will become Fox's co-chief operating officer alongside long-time Murdoch stalwart Chase Carey, the latest step in his come back after he was forced to relinquish some roles during a phone hacking scandal in Britain.
Both sons have at various times been tipped as the heir apparent to their father, and it remains to be seen whether they will be able to work together when Rupert finally hands over.
The announcement of Lachlan's return is a boost to Rupert, who has always said he would like his children to be involved in the running of his empire that consists of movie studios, television networks and newspapers around the world. Rupert split News Corp into the two separate businesses in 2013.
"Lachlan is a strategic and talented executive with a rich knowledge of our businesses," Rupert said in a statement. "James has done an outstanding job driving our global television businesses."
Lachlan had been tipped to succeed Rupert, but in 2005 suddenly stepped down after clashing with his father's executives in New York. During his time away from the head office, Lachlan had remained as a director at News Corp and Fox.