The 21-year-old Walcott, who has won 11 caps, would have been the youngest member of the party. He started both England's warm-up matches against Mexico and Japan in the past week but had an injury-disrupted season with his club.
Manchester City midfielder Gareth Barry, 29, passed a fitness test after recovering sufficiently from a sprained ankle and was included in the squad but six other players were cut from Capello's original 30 players.
Defenders Michael Dawson and Leighton Baines, midfielders Tom Huddlestone, Adam Johnson and Scott Parker and striker Darren Bent were omitted from the final squad.
England depart for the June 11-July 11 tournament on Wednesday and play their first Group C match against the United States in Rustenburg on June 12.
Squad:
Goalkeepers: Robert Green (West Ham United), Joe Hart (Manchester City), David James (Portsmouth).
Defenders: Jamie Carragher (Liverpool), Ashley Cole (Chelsea), Rio Ferdinand (Manchester United), Glen Johnson (Liverpool), Ledley King (Tottenham Hotspur), John Terry (Chelsea), Matthew Upson (West Ham United), Stephen Warnock (Aston Villa).
Midfielders: Gareth Barry (Manchester City), Michael Carrick (Manchester United), Joe Cole (Chelsea), Steven Gerrard (Liverpool), Frank Lampard (Chelsea), Aaron Lennon (Tottenham Hotspur), James Milner (Aston Villa), Shaun Wright-Phillips (Manchester City)
Forwards: Peter Crouch (Tottenham Hotspur), Jermain Defoe (Tottenham Hotspur), Emile Heskey (Aston Villa), Wayne Rooney (Manchester United).
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