Yao suffered a hairline fracture in his left foot in the Rockets' second-round playoff loss to the Lakers on May 8. The team initially said Yao would miss eight to 12 weeks, but team doctor Tom Clanton examined Yao's foot in Houston on Wednesday and said the injury has not responded to the treatment program.
A bone scan conducted Wednesday night revealed the fracture had not healed. The team now says no timeline is set for Yao's return to basketball activities, though Clanton said Yao is experiencing no pain in his foot.
"Unfortunately Yao's foot hasn't healed the way we had hoped at this point and our next step is to consider what we can do to get Yao ready for the start of next season," Yao's agent, John Huizinga, told KRIV-TV in Houston. "Obviously he is disappointed."
The team said the original treatment plan called for Yao to cease all physical training and to use a walking boot to immobilize the foot and promote healing.
Team spokesman Nelson Luis said late Wednesday night that Yao and the Rockets will consult with doctors before proceeding with a new course of treatment.
Earlier Wednesday, Rockets general manager Daryl Morey called Yao the "cornerstone of the team" and said he had no intention of trading him, no matter what another team might offer. The Rockets have no picks in Thursday's NBA draft and Morey said he's trying to acquire one.
Yao's contract expires after next season, with a player option for the 2010-11 season.
He was the Rockets' leading scorer and rebounder in their first nine playoff games, but injuries have now cut short each of his last four seasons.
Yao missed 21 games in 2005-06 because of an infection in his left big toe, then broke a bone in his left foot in April. He broke his right leg in the 2006-07 season and sat out 32 games, then suffered a stress fracture in his left foot in 2007-08 and missed the playoffs.
He played in 77 games last season before injuring the same troublesome foot again in Game 3 against the Lakers. Two days later, Yao was surprisingly upbeat and seemed confident this injury was not serious.
"I think I've been in harder situations before, much harder than this one," he said. "I believe that I can get through this one, too."
Yao returned to China after the playoffs and has spent time participating in charity events. His offseason was also scheduled to include a basketball camp in Beijing from July 30-Aug. 2.
Information from The Associated Press was used in this report.