AS Roma captain Totti, who quit the national side after their 2006 World Cup triumph, had considered making himself available for the June 11-July 11 tournament in South Africa but the inconsistent Azzurri will have to do without his creativity.
Lippi has not disclosed if Totti had offered to play.
The inclusion of Villarreal forward Giuseppe Rossi at the expense of Juventus centre back Nicola Legrottaglie provided the only other surprise in the 30-man squad, which will be cut to 23 with four standby players next Tuesday.
Legrottaglie has not been a regular for a struggling Juve this season but his omission means Italy lack experienced cover for centre backs Fabio Cannavaro and Giorgio Chiellini.
Defenders Salvatore Bocchetti, Leonardo Bonucci and Mattia Cassani have just six caps between them.
"Obviously, against some teams it will be necessary to make selections with great care, especially in defence. At the moment, I think it's the area that there are most doubts about," former Italy midfielder Stefano Fiore told Reuters.
"But if you don't give players the chance to mature, even with some negative performances, they will never come through. Italy should have started this process of making the team younger a little earlier."
Lippi, who has hinted he will quit after the World Cup, named keeper Federico Marchetti despite a leg injury but Luca Toni was omitted as expected having been ignored for months.
The striker flopped at Euro 2008, was dropped by Bayern Munich and has suffered injury problems in an otherwise decent loan spell at Roma.
Few Italy fans expect their team to defend their title despite their opponents in Group F being Paraguay, New Zealand and Slovakia.
Although Italy qualified unbeaten, a series of lacklustre displays and an ageing team have sapped optimism and many believe Lippi is relying too heavily on his 2006 heroes.
"Even though Italy are defending champions, we certainly aren't favourites, above all because of what was seen during the qualifying campaign," said Fiore, a Euro 2000 finalist.
"There are teams who, on paper and on the field, look better than Italy. That said, football is full of surprises and at the last World Cup Italy certainly weren't favourites."
Goalkeepers: Gianluigi Buffon (Juventus), Morgan De Sanctis (Napoli), Federico Marchetti (Cagliari), Salvatore Sirigu (Palermo)
Defenders: Salvatore Bocchetti (Genoa), Leonardo Bonucci (Bari), Fabio Cannavaro (Juventus), Mattia Cassani (Palermo), Giorgio Chiellini (Juventus), Domenico Criscito (Genoa), Fabio Grosso (Juventus), Christian Maggio (Napoli), Gianluca Zambrotta (AC Milan)
Midfielders: Mauro Camoranesi (Juventus), Antonio Candreva (Juventus), Andrea Cossu (Cagliari), Daniele De Rossi (AS Roma), Gennaro Gattuso (AC Milan), Claudio Marchisio (Juventus), Riccardo Montolivo (Fiorentina), Angelo Palombo (Sampdoria), Simon
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