Liam Williams was the lone survivor from the run-on side beaten 29-21 by Australia in Cardiff last week, although he will now move to fullback from wing.
Lydiate, who will be captaining his country for the third time, was a member of a revamped back-row for what will be Wales's first international against 2019 World Cup pool opponents Georgia.
In the midfield Owen Watkin, who made his debut last Saturday, partners Scott Williams with Rhys Webb alongside in-form Bath No 10 Rhys Priestland at half-back.
In the pack Leon Brown, who made his Test debut against Australia, lines up alongside Nicky Smith and Kristian Dacey in the front row, with Cory Hill and Adam Beard the two locks.
Lydiate packs down in a back-row alongside Sam Cross at openside and Seb Davies at No 8.
Cross, a member of Great Britain's silver medal-winning sevens squad at the 2016 Rio Olympics, will be making a first Wales start in just his fourth game of professional 15-a-side rugby union.
He featured as a substitute against Australia as did Watkin, Hill, Brown and Dacey.
Webb has recoved from a knee injury while Scott Williams replaces the sidelined Jonathan Davies at outside centre.
With Tests against world champions New Zealand and South Africa still to come before Wales complete their end-of-year campaign, Gatland felt this was the right time to make wholesale changes against a Georgia side who, although a second-tier rugby nation, are renowned for their strength in the scrum.
"We felt this week was really important to give a number of the squad as much exposure as possible to Test match rugby," said Gatland after unveiling his team on Thursday.
"It is an exciting opportunity for some of the younger guys to take the field and show us what they are capable of," the New Zealander added.
Wales's team does feature several seasoned Test performers in wing Alex Cuthbert and Scott Williams while the likes of No 8 Taulupe Faletau and fly-half Dan Biggar are on the bench.
"We have got a fair amount of experience to throw into the mix too, both with players who have got a decent number of cap numbers but also players who have been around this environment for a good while too," said Gatland.
Georgia will arrive in Cardiff on the back of thumping Canada 54-22 in Tbilisi last weekend.
"Georgia are coming to Cardiff on the back of a good victory last weekend and they will be looking to show what they can do on this stage and we have to be ready for that," added British and Irish Lions coach Gatland.
His Georgia counterpart and fellow New Zealander, Milton Haig, retained the same starting XV from the side that played Canada with centre Davit Kacharava set to win his 104th cap.
Liam Williams; Alex Cuthbert, Scott Williams, Owen Watkin, Hallam Amos; Rhys Priestland, Rhys Webb; Seb Davies, Sam Cross, Dan Lydiate (capt); Cory Hill, Adam Beard; Leon Brown, Kristian Dacey, Nicky Smith.
Replacements (16-23): Elliot Dee, Wyn Jones, Tomas Francis, Josh Navidi, Taulupe Faletau, Aled Davies, Dan Biggar, Owen Williams
Coach: Warren Gatland (NZL)
Soso Matiashvili; Giorgi Koshadze, Davit Kacharava, Merab Sharikadze (capt), Miriani Modebadze; Lasha Khmaladze, Vasil Lobzhanidze; Beka Bitsadze, Vito Kolelishvili, Lasha Lomidze; Giorgi Nemsadze, Kote Mikautadze; Levan Chilachava, Jaba Bregvadze, Mikheil Nariashvili
Replacements (16-23): Shalva Mamukashvili, Kakha Asieshvili, Soso Bekoshvili, Giorgi Chkhaidze, Giorgi Tkhilaishvili, Giorgi Begadze, Rezi Jintchvelashvili, Merab Kvirikashvili
Coach: Milton Haig (NZL)