The 7-foot-6 Yao has been out since Nov. 10, and played in only five games this season before the team declared him lost for the season. The seven-time All-Star missed all of last season following reconstructive foot surgery.
Team doctor Tom Clanton performed the procedure in Houston.
"I know this will be another long rehab," Yao said in a statement. "But I'm looking forward to beginning my recovery. I will use this time to consider all of my options, and will make a decision regarding my career plans as I get closer to the end of my rehab."
The Rockets drafted Yao with the top overall pick in 2002, but his NBA career has been derailed by a rash of injuries, mostly to his left foot and ankle.
His contract with Houston expires after this season, and the Rockets are still awaiting word from the league if they'll be granted a disabled player salary exception for Yao.
That would allow Houston to acquire a free agent, or trade for a player without having to match salaries, up to the value of the midlevel exception (about $5.75 million).
The league granted Houston the same disabled player exception for Yao in 2009, and the Rockets used that money (about $5.7 million) to sign swingman Trevor Ariza. Houston traded Ariza to New Orleans after one season as part of a four-team deal that brought Courtney Lee to the Rockets.
Houston is 16-19 heading into Friday's game at Orlando.
Yao missed only two games in his first three seasons. The injury problems began in the 2005-06 season, when he missed 21 games with an infection in his left big toe. He broke his left foot late in the season, and missed the last four games.
He played in 77 regular-season games in 2008-09, but then sustained a hairline fracture in his foot that required complex surgery.
The Rockets carefully monitored his minutes going into this season, but Yao was injured in Houston's 98-91 loss to the Washington Wizards on Nov. 10.