In January 2012 the Mariners and Vargas agreed on a 1-year deal worth $4.85 million for the 2012 season. In July, Vargas went 5–0 in six starts, had an AL-best 1.64 ERA, and was named the AL Pitcher of the Month. For the season, he was 14–11 with a 3.85 ERA, his 33 starts were fourth in the league, and his 217.3 innings pitched were sixth in the American League, while his 35 home runs given up were second in the league.