The Padres acquired Kennedy just before Wednesday's trade deadline for left-handed reliever Joe Thatcher, a minor leaguer and a draft pick.
Kennedy, 21-4 two seasons ago, is 3-8 with a 5.23 ERA in 21 starts and hasn't won a game in two months.
He's expected to start Sunday at Petco Park against the New York Yankees, the team that took him in the first round of the June 2006 draft.
"He's the first guy I have ever traded for twice," said Padres general manager Josh Byrnes, who was in the same job with Arizona when he obtained Kennedy in a three-way deal with the Yankees and Detroit Tigers on Dec. 8, 2009. "He's not too different than the first time -- a first-round pick, a pedigree guy. In Arizona he won a lot of games and pitched a lot of innings and we got to know him well as a pitcher there.
"He is a very legitimate starting pitcher, something we need to take another step forward. Obviously in his best year he almost won a Cy Young Award so we're happy to have him."
Another factor that makes Kennedy attractive to the Padres is that he's under club control through 2015.
Kennedy is 49-38 with a 3.99 ERA in 133 major league games, all but two as a starter. He was Arizona's opening day pitcher the past two seasons but is 0-5 in his last 10 starts, a period that included a 10-game suspension for his role in the incident that led to a bench-clearing brawl against the Los Angeles Dodgers on June 11. The brawl erupted after Kennedy hit Zack Greinke with a high pitch after doing the same to Yasiel Puig earlier in the game.
Kennedy's last victory was June 1 against the Chicago Cubs.
After losing 5-2 at Tampa Bay on Tuesday night, Kennedy acknowledged that recent trade rumors have not helped.
"It's hard to ignore," he said. "You walk into this clubhouse, the first thing that was said to me is not something you want to think about when you're going out there to pitch. ... It was good natured, but it's not something you want to hear when it's your start day."
Byrnes said he's not concerned about Kennedy's recent struggles.
"A lot of deals happen that way, to the extent he has had a down year for him," Byrnes said. "We have scouted him a lot, watched him recently and tried to assess at age 28 why that is and look at Justin Masterson or Ervin Santana. There are guys who struggled last year and are having a good year this year. We are hopeful he can come here and get back to that form he had."
Arizona general manager Kevin Towers, a former GM of the Padres, has said the team needed a situational left-hander in the bullpen and he got one in Thatcher, who is 3-1 with a 2.10 ERA in 50 games this season.
The Diamondbacks also got 23-year-old right-hander Matt Stites, who is 2-2 with a 2.08 ERA and 14 saves in 46 games with Double-A San Antonio.
Arizona has lost three straight and is 3½ games behind first-place Los Angeles in the NL West. San Diego is 8½ out.
Thatcher bolsters what's been a shaky bullpen for Arizona. He has limited left-handed batters to a .215 average.
"Things happen and now I get to go back with Kevin Towers again," Thatcher said. "He is a good GM. It's exciting to get traded. It's a big deal. It brings excitement to be in a pennant race. That is all you ask for, is to win. I'm looking forward to getting over there and helping out and doing whatever they need from me."
Thatcher called Kennedy "a front-line starting pitcher. So I think San Diego is going to benefit from this as well."
Arizona gets the Padres' competitive balance pick between the second and third rounds of next year's draft.