Shaikh Ahmad Al Gamdi, head of the Commission of the Promotion of Virtue and Prevention of Vice (CPVPV) branch in the holy city of Makkah, said women should not be required to cover their faces and they can drive cars.
His remarks were received by applause from women attending the event.
In April, Al Gamdi drew mixed reactions in the kingdom after he said there is nothing in Islam that bans the mixing of the two sexes.
Reports at that time said that the cleric was fired from his job upon mounting pressure from hardliners but was later reinstated as CPVPN chief.
Observes predicted that the reinstatement was made following a higher directive, normally referred to as a King's order.
Saudi newspapers yesterday published pictures of Al Gamdi while speaking to unveiled women journalists participating in a forum in the Red Sea city of Jeddah. The forum, which ended on Tuesday, discussed women's participation in national development.
Speaking at a session on "Principles of Islamic jurisprudence of woman participation in national development," Al Gamdi pointed out that there is nothing in Islam preventing women from driving cars and go unveiled without excessive makeup.
He criticised those opposing women work, saying that the participation of women in national development is a right guaranteed by Islamic sharia hundreds of years ago.
"There is no problem for a woman to go outside her home for work to earn a living, " he added. He pointed out that the views of those opposing women work are based on customs and traditions and their fear of Westernisation of Muslim women.
Saudi Arabia strictly bans socialising between men and women. It also bans women from driving. Most Saudi women are employed at the Ministry of Health to treat female patients and at girls' schools.
There is no problem for a woman to go outside her home for work to earn ?a living."