Pelosi made the decision to appoint members after meeting Wednesday with House Speaker John Boehner, R-Ohio, about the terms of how the panel will operate.
Pelosi has tapped Rep. Elijah Cummings, D-Md., who now serves as the top Democrat on the House Oversight and Government Reform Committee, which has held several hearings examining the Benghazi attack.
Pelosi also named Rep. Adam Smith, D-Wash., who is the House Armed Services Committee ranking member, Rep. Adam Schiff, D-Calif., who serves on the House Intelligence Committee, Rep. Linda Sanchez, D-Calif., and Rep. Tammy Duckworth, D-Ill., an injured war veteran who serves on both the Armed Services and House Oversight panels.
Pelosi said she failed to reach a deal with Boehner regarding the "shape and standards" of the committee. "We had hoped for a level of fairness and transparency and balance, especially considering the subject matter. We were not able to reach an agreement."
"Regrettably the Republican approach does not prevent the unacceptable and the repeated abuses committed by Chairman Issa in any meaningful way."
But Pelosi said "that's all the more reason for Democrats to participate in the committee -- to be there to fight for a fair hearing and process, to try to bring some openness and transparency to what's going on."
Pelosi added she "could've argued this either way." But she said the tipping point was her desire to ensure Democrats defend against Republican "abuses that have occurred in the previous Issa investigation."
"If the process had appeared to be fair and more transparent and the rest, there would be more trust in it. But since it wasn't, we need to be at the table."
"It is important for the American people to have a pursuit of these questions done in a fair and open and balanced way as possible. That simply would've have been possibly leaving it to the Republicans."