The left-hander hasn't pitched since May 5 because of a flexor muscle strain. He will fill the rotation spot of Danny Duffy, who was placed on the DL Monday with biceps tendinitis.
Left-hander Brandon Finnegan was optioned to Triple-A Omaha to make room for Vargas. Finnegan was recalled Monday and he pitched three hitless innings in relief of Jeremy Guthrie during the Royals' 14-1 loss to New York.
Vargas is 3-1 with a 5.26 ERA in five starts this season.