The other change in the backline sees uncapped Scarlets wing and former Llandovery and Scarlets Academy player George North handed his first international chance, becoming Wales' 1,078th player at just 18 years of age.
Up front the coaches have said same again to the forward pack, led by captain Matthew Rees, which impressed against the Wallabies last time out with the exception of Martyn Williams who returns in the back row for his 97th cap in place of his injured Blues colleague Sam Warburton (calf).
Elsewhere, Ryan Jones (Ospreys) and Andy Powell (Wasps) both return to bench duty in place of the promoted Williams and Dieniol Jones (Blues), who misses out, while Ospreys pivot Dan Biggar makes way for Bishop.
"We worked hard last week on ensuring we were combative up front, we put a huge emphasis on forward play in training and we now know we can bring that kind of game into play when necessary," said Gatland.
"We were happy with aspects of our performance against Australia, but you can't work on everything in just a two week build up and we have been able to introduce new aspects this week.
"The coaches have told the players they have a licence to be creative, to be confident with the ball in hand, to offload and to be positive in attack, we need to build on that performance last week.
"We know this is a bold selection, but we have always tried to look at the bigger picture and George (North), today, is the bigger picture and at 6ft 4 inches and 16stone 7lbs he gives us quite a canvass to work with.
"There is no pressure on him, he just needs to go out and enjoy the experience of winning his first cap.
"With Lee Byrne back at full-back and James Hook hopefully with the ball in his hands more often at centre we have plenty of experience and guile around in our back line and are simply looking for the same again up front."
Wales 15 Lee Byrne; 14 George North, 13 Tom Shanklin, 12 James Hook, 11 Shane Williams; 10 Stephen Jones, 9 Mike Phillips; Gethin Jenkins, Matthew Rees (C), Adam Jones, Bradley Davies, Alun Wyn Jones, Dan Lydiate, Martyn Williams, Jonathan Thomas
Replacements 16 Huw Bennett, 17 Paul James, 18 Ryan Jones, 19 Andy Powell, 20 Richie Rees, 21 Andrew Bishop, 22 Chris Czekaj