The Pistons announced Tuesday that McDyess was back for the rest of the season, but did not disclose financial terms of the deal. He was in uniform for Tuesday's game in Washington, playing 25 minutes and scoring nine points in a 107-94 loss.
"He's our best rebounder. He's one of our best post defenders," Detroit coach Michael Curry said.
The Nuggets waived McDyess a short time later, and he had to wait 30 days before rejoining the Pistons.
The 6-foot-9 forward-center averaged seven points and two rebounds in two games for Detroit before the trade.
"You could notice the difference without him. That was a big part of losing him in that trade," Curry said. "The things he brought to the table were sorely missed."
The 34-year-old Mississippi native signed with the Pistons after they won the 2004 NBA title and helped them reach the finals in his first season and conference finals in the next three.
Information from The Associated Press contributed to this report.