The 81-year-old, a fixture on the fringes of government for decades, has been in search of a new moniker for his party of mostly-elderly men since falling out with his last co-conspirator, with whom he jointly led the Japan Restoration Party.
The grouping of about 20 lawmakers include sworn allies, 74-year-old Takeo Hiranuma, Hiroyuki Sonoda, 72, and Nariaki Nakayama, 71, as well as wrestler-turned-politician Antonio Inoki, 71.
At a press event to reveal the party's name, whose official English translation has not yet been decided, the firebrand Ishihara noted: "The situation that faces young people today is different from what we experienced."
"It is our responsibility to lead the people of the next generation."
Ishihara was previously a four-term governor of Tokyo. It was his plan to buy the Japanese-administered Senkaku Islands that sparked the present row over their ownership with China, which claims them under the name Diaoyus.
Japanese public life is largely dominated by older men, whose conservative views on gender and equality were thrust into the spotlight last week by the sexist heckling of a 35-year-old Tokyo Assemblywoman as she spoke in a debate on motherhood by a relatively-youthful 51-year-old.
Around a quarter of Japan's 127 million people are 65 or older, one of the highest proportions in the world, and one that is expected to rise to 40 percent in coming decades.