Both Vargas and manager Ned Yost said the simulated game went as well as could have been expected.
"It's a positive first step," Yost said. "He had all three pitches working. Real good changeup."
Vargas will throw another live batting practice on July 18 in Arizona, then fly back to Kansas City for more live BPs in late July and early August.
Yost said Vargas could go out on a rehab assignment somewhere around Aug. 7-12.
"If everything goes well," Yost said, "he could be back here with us around Sept. 5."
But that is provided there are no setbacks, even minor ones. The Royals in the past have been extra cautious about returning players recovering from Tommy John surgery to the Major Leagues much sooner than 14 months post-surgery. That was the case for Danny Duffy and Luke Hochevar.
That would push Vargas' timetable for a return to the big leagues to late September or for a potential postseason run in October. The Royals also would have to clear room on the 40-man roster for Vargas, who is on the 60-day disabled list.
The Royals also may need to eventually clear room on the 40-man roster for left-hander Mike Minor, also on the 60-day disabled list. Minor (left labrum surgery in 2015) experienced a setback in his rehab last month and is throwing side sessions while he awaits another rehab assignment.
Vargas is in the third year of a four-year, $32 million deal. He is under contract for $8 million in 2017.
Jeffrey Flanagan has covered the Royals since 1991, and for MLB.com since 2015. Follow him on Twitter @FlannyMLB. This story was not subject to the approval of Major League Baseball or its clubs.