The Blue Jays made the move before Monday night's game at the Los Angeles Angels and activated outfielder Nolan Reimold.
Encarnacion ranks among the major league leaders with 26 home runs and 70 RBIs. He was picked Sunday for the American League All-Star team but won't be able to play in the game July 15 at Minnesota. Seattle Mariners third baseman Kyle Seager was named to the All-Star ream as a replacement.
The 26-year-old Seager, a first-time All-Star, entered Monday with a .274 average, 13 homers, 59 RBIs and 21 doubles.
Encarnacion was hurt while running out a double-play relay Saturday in Oakland.
The Blue Jays claimed Reimold off waivers from Baltimore over the weekend. He had back surgery last July and played 17 games for Double-A Bowie this year while on a rehabilitation assignment, hitting .315. Over parts of five seasons with the Orioles, he hit .252 with 41 home runs.
Also, Toronto outfielder Kenny Wilson was claimed off waivers by Oakland.
The Associated Press contributed to this report.