Prime Minister Chatichai Choonhavan resigned Saturday under pressure from the powerful military but was expected to be quickly reinstated.
All the Cabinet ministers automatically lost their positions with the prime minister's resignation. Once reinstated, Chatichai would choose a new Cabinet.It remained to be seen whether he would drop Cabinet members who had been sharply criticized by the military.
Some observers said Chatichai might be back in his job as early as the beginning of next week.
A statement from the prime minister's office announcing the resignation said "an unwanted situation" had developed and that Chatichai had tried to solve it by constitutional means.
The message seemed to be that Chatichai wanted to avoid firing the ministers the military had criticized because it would represent a defeat for his democratically installed government.
The military, which once regularly staged coups d'etat, has in recent years formally voiced support for Thailand's fledgling democracy. But it has also insisted on being a "watchdog" over state and society, its leaders frequently making political pronouncements.
The prime minister's resignation came amid increasing criticism of his seven-party coalition government, which critics accuse of being corrupt, inept and beset by internal squabbling.
Kukrit Pramoj, who heads the Social Action Party, one of the key parties in the government coalition, predicted in a television interview that Chatichai would regain his post.
Bangkok newspapers also said Chatichai had secured sufficient backing to return to office.
Chatichai and the Cabinet remain in place in a caretaker status until the president of the Parliament, Wan Chansue, proposes a new prime minister.
The new prime minister must be formally endorsed by King Bhumibol Adulyadej, the constitutional monarch. Analysts said Wan might propose Chatichai as early as Sunday.