Warburton was involved in the unconvincing, tour-opening win over a Provincial Barbarians side but missed the subsequent loss to the Auckland Blues and Saturday's morale-boosting 12-3 victory over the Canterbury Crusaders due to fitness concerns.
The Warren Gatland-coached Lions can expect another bruising test of their credentials with the three-match series against the All Blacks looming on the horizon.
"At this stage of the tour everyone has had a start and as coaches we are happy that all the players have had a chance to put their hand up and perform in the Lions jersey," Gatland told reporters after announcing his squad on Sunday.
Gatland's side has just three more tour outings before the opening match against the All Blacks in Auckland on June 24 and a similar performance in Dunedin to the one in Christchurch will go a long way towards deciding his preferred test lineup.
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"Each game is a chance for individuals to shine but more importantly it's about a collective performance. We are building some momentum and we have improved with every game," he added.
"We were obviously pleased with the win against the Crusaders, especially our defence and game management, but we know the Highlanders will be another massive test for us as a squad."
With Warburton still looking to get back to full fitness after recovering from a minor ankle injury, flyhalf Dan Biggar has been passed fit to start after picking up a concussion in the 22-16 defeat to the Blues last Tuesday.
Elsewhere, Jared Payne will start at fullback despite an ongoing calf complaint and is joined by Jack Nowell and Tommy Seymour in the back three, with Jonathan Joseph and Robbie Henshaw in the midfield.
Looking at the opposition, the Highlanders may only be ranked fourth of the five New Zealand franchises in this year's Super Rugby tournament but the 2015 champions have won 10 of their 14 matches and are assured of at least a playoff berth.
They will also be bolstered by the inclusion of three All Blacks with hooker Liam Coltman, flyhalf Lima Sopoaga and winger Waisake Naholo all included in coach Tony Brown's side for the clash at Forsyth Barr Stadium.
Squad: 15-Jared Payne, 14-Jack Nowell, 13-Jonathan Joseph, 12-Robbie Henshaw, 11-Tommy Seymour, 10-Dan Biggar, 9-Rhys Webb, 8-CJ Stander, 7-Sam Warburton (captain), 6-James Haskell, 5-Iain Henderson, 4-Courtney Lawes, 3-Kyle Sinckler, 2-Rory Best, 1-Joe Marler.
Replacements: 16-Ken Owens, 17-Jack McGrath, 18-Dan Cole, 19-Alun Wyn Jones, 20-Justin Tipuric, 21-Greig Laidlaw, 22-Owen Farrell, 23-Elliot Daly.
(Writing by John O'Brien; Editing by Ian Ransom)
