The 44-year-old was recalled from Goa after Santosh Kashyap was asked to quit after the team's failure in the Federation Cup and the back-to-back defeats in the I-League.
Karim had served Mohun Bagan for 19 months before joining Salgaocar Sports Club in 2010 and won the I-League and Federation Cup in 2011.
Karim had left Bagan 33 months ago after differences cropped up between him and club officials.
Karim, who was with Salgaoncar before this assignment, said, "I am very happy to be back with Mohun Bagan. It's a new challenge and I am very comfortable in taking up challenges."
Karim, in his first stint, had shepherded Bagan to become runners up in the I-League and champions in the Federation Cup. It also topped the Calcutta Premier League.
But Mohun Bagan failed to win any tournament after Karim left the club.
Karim said under his coaching Salgaocar not only saved relegation, but emerged as champions in the I league.
"I know the responsibility on my shoulder. Hopefully this will be a great season for Mohun Bagan again. We are now four points behind the league leader. It