Three sources who wished to remain anonymous told ESPN.com that the violation occurred due to marijuana use.
Wood, Jefferson and Montgomery were inactive for Sunday's 17-16 loss to the Kansas City Chiefs, the Texans' fifth consecutive loss.
"I don't understand why they did it," Texans outside linebacker Brooks Reed said. "They had the opportunity of their lives and they just kind of threw it away. I don't have too much to say about it. It's really unfortunate. We lost a lot of depth for that game. They were great players and they had a lot of potential. We're just going to find more guys that are more dedicated to the cause."
Jefferson's agent, Chad Cannon, told ESPN.com that the players were smoking a cigar in the team hotel and that illegal drugs were not involved.
"We're discussing the possibility of filing a grievance," Cannon said. "I need to be in touch with them and really figure if that's the best route to take."
Montgomery told Comcast SportsNet Houston that he walked into a hotel room where Wood and Jefferson were smoking a cigar Saturday and was later called from a meeting by coach Gary Kubiak.
"I won't discuss team rules and those type of things," Kubiak said during his Monday news conference. "I'll make decisions based on a body of work in everything I do. I've got five months of work invested in those three young men and made a decision today to move forward."
Montgomery was a third-round draft pick by the Texans and was inactive for the first seven games of the season. He went into rookie minicamp out of shape and suffered an injury shortly thereafter that limited him in offseason workouts and practices.
After the break following offseason workouts, Montgomery showed up at training camp -- again out of shape -- and began training camp on the non-football injury list. Wood, an undrafted free agent, was the Texans' third running back, and his absence became critical against the Chiefs when starter Arian Foster aggravated a hamstring injury and could not finish the game.
Jefferson, an outside linebacker, also was one of four undrafted rookies the Texans signed after training camp. He began his college football career at Baylor before being kicked off the team, then finished his college career at Stephen F. Austin.