The 24-year-old Hughes, who was 18-8 last year for the Yankees, is 0-1 this season, allowing 19 hits and 16 earned runs in his three starts for a 13.94 ERA.
"Something had to be done," Hughes told reporters before Friday's game against the Texas Rangers. "The arm strength is not there. My arm feels dead."
Yankees manager Joe Girardi said the club did not think Hughes had any sort of significant injury.
"We decided it was in his best interest to get him on a long-toss program and see if we can get him out of that fatigue or dead arm (period)," said Girardi.
Veteran Bartolo Colon will take over Hughes's spot in the rotation, the manager said.
The Yankees, first in the AL East with a 7-4 mark, recalled pitcher Lance Pendleton from Triple-A to take Hughes's spot on the roster and fill in at the long relief role that had been held by Colon. Pendleton was 1-1 with a 1.59 ERA at Triple-A.
(Writing by Larry Fine, Editing by Mark Lamport-Stokes)