Karinchak entered the game in the eighth inning with a 3-1 lead, but gave up a walk, a single and a three-run homer to Jonathan Araúz. Karinchak was removed following the home run in the 4-3 defeat.
The move was announced before Saturday's game against the Red Sox. First baseman Bobby Bradley, who had been out with a sore knee, was activated from the 10-day injured list.
Karinchak has gone from being one of the most dominant relievers in the American League to the minors in a span of six weeks. He was 6-2 and had a 2.52 ERA, with 68 strikeouts in 39 1/3 innings over 41 games at the All-Star break.
In 18 appearances since the break, Karinchak has a 1-2 record and an 8.40 ERA, with nine strikeouts in 15 innings pitched. He had nine saves in 11 chances before the break, but has two in five opportunities since Emmanuel Clase has taken over the closer's role.
Araúz was recalled Friday after Boston placed two players on the COVID-19 list. Araúz fouled off two bunt attempts before driving a 3-2 pitch well over the wall in right field.
Karinchak is 7-4 with a 4.14 ERA and has struggled since Major League Baseball cracked down on pitchers using sticky substances.
"I can't speak for James and specifically what he feels," Indians pitching coach Carl Willis said. "I don't know exactly how he's gone about things in terms of that throughout the season."
"I will say this. Sticky stuff, generally speaking, if it didn't make a difference, they wouldn't have made it illegal. But in his specific case, that's something that you'd have to ask him because I'm not really privy or allowed to be in terms of everything he may have done or may not have done," he said.