Lowe has made 377 starts and 295 relief appearances during his 16-year Major League career.
"Derek Lowe has a longtime track record in a variety of different roles," general manager Jon Daniels said. "He's had some success last year in the bullpen, and if he throws like that again, he should be able to help us."
Lowe was a closer early in his career for the Red Sox before becoming a starter. He had 81 saves for Boston from 1999-2001 before becoming a starter in 2002. From 2002-11, he made 334 starts in a 10-year period and was 145-114 with a 4.02 ERA.
Last year, he was 8-10 with a 5.52 ERA in 21 starts for the Indians. He was released by the Indians on Aug. 12 and immediately signed by the Yankees. They put him in the bullpen, and he went 1-1 with a 3.04 ERA in 17 relief appearances.
"We'll have to see where he is," Daniels said. "He has been throwing, but I don't know if we'll have time to get him stretched out as a starter, but he should at some point be ready to throw multiple innings. Our interest is primarily as a reliever, but his versatility is valuable. He can do both."
Lowe will likely throw a bullpen session for the Rangers on Friday and then need at least a couple of live batting-practice sessions before pitching in a game.
T.R. Sullivan is a reporter for MLB.com. Read his blog, Postcards from Elysian Fields, and follow him on Twitter @Sullivan_Ranger. This story was not subject to the approval of Major League Baseball or its clubs.