A convoy of lorries rolled into the main square of the Andean town near Lake Titicaca and 220 officers began restoring order, the government said.
Police had pulled out on Monday after thousands of people attacked their station with petrol bombs.
Impoverished local people have been protesting for weeks about corruption.
Mayor Cirilo Fernando Robles Cayomamani was forcibly paraded through the city in front of thousands of people, many thought to be from outside the town, before being beaten and left to die.
He had been seized along with at least three other officials after refusing to resign in the face of more than three weeks of protests which closed schools and two bridges linking Peru to Bolivia, and severely disrupted economic activity.
Television pictures from the town show a building and vehicle set ablaze on Monday.
Mass protests
Interior Minister Fernando Rospigliosi said his officers were retaking control of Ilave on Tuesday but he warned it would be a "slow process".
At the height of the unrest, there were thought to be about 10,000 protesters in Ilave, a town of some 16,000.
They accused the mayor of embezzling state funds.
Mr Rospigliosi said the situation could not be resolved by force given the sheer size of the protests.
He warned that the protests could easily mushroom again.
'Death foretold'
The Peruvian media report that there have been calls for the interior minister's resignation.
"The lynching of Robles Cayomamani... was the chronicle of a death foretold," La Razon newspaper wrote on Tuesday.
It described "terrible conditions" suffered by locals in the region around Lake Titicaca and blamed the government for failing to take action to alleviate them.
Among the factors it identified as contributing to the violence were: high altitudes, intense cold, alternate cycles of droughts and flooding and endemic poverty.