Castillo, 22, thus becomes a free agent after spending the past six seasons in the Rangers' Minor League system. He was on the team's 40-man roster last season and went 3-6 with a 6.46 ERA and nine saves in 42 games for Double-A Frisco.
The Rangers could try to re-sign Castillo to a Minor League deal, but he is free now to negotiate with any of the 30 Major League teams.
As expected, Texas tendered offers to its seven arbitration-eligible players -- catcher Mike Napoli, shortstop Elvis Andrus, outfielders David Murphy and Nelson Cruz, left-handed pitcher Matt Harrison and right-handed relievers Mark Lowe and Mike Adams.
Salary arbitration filings are made from Jan. 5-15 and the team and players exchange offers on Jan. 18. If no deal can be reached, arbitration hearings are conducted in St. Petersburg from Feb. 1-21.
With Castillo's release, the Rangers' 40-man roster now stands at 36 players.