Saunders gave up four homers and seven runs in five innings on Monday night in a 7-1 loss to the Orioles. That left him 0-5 with a 6.13 ERA.
"I just don't think it's worked out to his liking and we just wanted to try something new and different at this point," assistant general manager Thad Levine said.
The Rangers have 10 days to trade, release, or outright Saunders to the minor leagues. But it appears likely his time with Texas is over.
"It was something we discussed, and we felt like it was best we go in another direction," manager Ron Washington said. "We appreciate everything Joe done. He was a pro. Sometimes, things just doesn't work out."
The Rangers (37-5) had lost 10 of 12 through Monday and were mired in fourth place in the AL West, 14 games behind division-leading Oakland.
So instead of waiting to see if the 33-year-old Saunders could break his extended slump, Texas recalled 25-year-old Miles Mikolas from Triple-A Round Rock. Although Levine labeled Mikolas "a work in progress," he said and the right-hander will start Wednesday at Baltimore and become part of the starting rotation.
Mikolas was 5-1 with a 3.22 ERA in 16 games, including six starts, for Round Rock. He entered the year with just 11 career starts at the minor league level, all in 2009, his first professional season. But Mikolas was 3-1 with a 3.58 ERA after joining the Express rotation on May 30.
So the Rangers bid farewell to Saunders and welcomed Mikolas to the big leagues.
"It just so happens we have a starting pitcher at Triple-A who our manager and Triple-A pitching coach are highly recommending we give a chance at the big league level," Levine said. "So I think those two paths cross and we decided to make this move at this point."
Saunders signed with Texas on March 5 and was given a job in the starting rotation on March 25, but he went on the 15-day disabled list after one start and did not return until May 28.
He never got in a groove after that. Including Monday's outing in Baltimore, Saunders yielded 20 runs in 15 2-3 innings over his last three starts.
"They have been miserable," he acknowledged. "It's tough man."
Saunders owns an 89-86 lifetime record and made the AL All-Star team in 2008. He broke into the majors with the Los Angeles Angels in 2005 and also pitched for Arizona, Baltimore and Seattle before latching on with the Rangers.
"He tried out with us in spring training this year, and he had strong beliefs that he could help us win major league games," Levine said. "I think what he ended up doing is he came in and gave us some very valuable innings. He also has been a consummate professional since he's been here."