The veteran outfielder was designated for assignment prior to Wednesday's game against Oakland. Gonzalez, who signed a minor-league contract in spring training, batted .210 with two home runs and seven RBIs in 30 games.
Manager Terry Francona praised Gonzalez's professionalism in the clubhouse, but stressed the decision came down to results.
"We weren't seeing the offense that we needed and he said that, too," Francona said. "Does it come with another 100 at-bats? We don't have a crystal ball and none of us is smart enough to know what the next 100 at-bats might bring."
Gonzalez, 33, played the last 11 seasons for the Colorado Rockies. The Indians hoped his left-handed bat would help offset the loss of free-agent outfielder Michael Brantley. Gonzalez, who had several solid seasons with the Rockies, didn't produce for an offense that is near the bottom in most categories in the AL.
Gonzalez batted cleanup six times, including Tuesday night when he was replaced by a pinch hitter in the seventh inning.
The Indians will give more playing time to Jordan Luplow and rookie Oscar Mercado, both right-handed hitters. Tyler Naquin, who is on the 10-day injured list with a strained calf, and Greg Allen, currently playing at Triple-A Columbus, could also be on the roster soon.
"We're also at a point where we feel like we need to find out about some of these younger guys," Francona said. "And if we don't find out that could be a mistake. We need to find out if these guys are guys that we can win with."
Backup infielder Mike Freeman started in left field Wednesday, marking his second career outfield appearance.
Francona said catcher Roberto Perez, who left Tuesday's game after being struck on the mask with a foul tip, will not go on the concussion list. Perez won't catch for a couple of days.
"He came in this morning and said he felt really good and he was clear-eyed, which is a good sign," Francona said. "You run through a series of tests and they send it to the league doctor. And he actually tested out really, really well. Like 100 percent."
Cleveland is 25-22 and trails first-place Minnesota by 6 1/2 games in the AL Central. While the lack of offense has been the major problem, pitchers Corey Kluber (broken right arm) and Mike Clevinger (strained muscle in upper back) are on the injured list.