In a corresponding move, the Yanks recalled reliever Joseph Harvey from Triple-A Scranton/Wilkes-Barre.
Catcher Gary Sanchez returned from an IL stint Wednesday, but with Frazier on the shelf, the Yanks once again have 13 players on the IL.
New York's outfield has been hit especially hard by injuries, as Frazier, Aaron Judge, Giancarlo Stanton, Aaron Hicks and Jacoby Ellsbury are all on the IL.
Additionally, third baseman Miguel Andujar, shortstops Didi Gregorius and Troy Tulowitzki, first baseman Greg Bird, starting pitcher Luis Severino and reliever Dellin Betances are out.
With so many quality hitters unable to play, Frazier is among the reserves who had been thriving. Although the 24-year-old began the season in the minors, he has been one of New York's best hitters since getting called up with a .324 average, six home runs and 17 RBI.
Frazier is second on the team to first baseman Luke Voit in both homers and RBI, and his average is tops among those who have appeared in at least three games.
On Wednesday, Frazier told MLB.com's Bryan Hoch that he would play through his ankle injury with so many other Yankees ailing: "It's sore. It's a little sprain, but it's one of those things where I went through too much last year to not go out there and play. The IL is too full for us, so I'm good. I'm going to keep playing."
Frazier was not in the lineup for New York's road wins over the Los Angeles Angles on Tuesday or Wednesday, and the decision was made to give him some time to heal up.
While Frazier is out, the Yankees are going to be thin in the outfield. Brett Gardner and Mike Tauchman will be every day starters, while utilityman Tyler Wade will likely be tasked with spending almost all his time in the outfield as well.
Frazier was starting to live up to his potential as the fifth-overall pick in the 2013 MLB draft by the Cleveland Indians, acquired by New York in the 2016 Andrew Miller trade, and he figures to be a big part of the New York outfield when he returns.
Despite their injury issues, the Yankees are second in the American League East at 14-10 and trail the Tampa Bay Rays by just 1.5 games.