Carapaz, who was among the favourites to win the third Grand Tour of the year, suffered a shoulder injury in a crash last weekend at a race in the Netherlands.
Jose Joaquin Rojas will replace Carapaz off the Movistar reserve bench.
"Richard Carapaz will not start the 74th Vuelta a España on Saturday," Movistar said in a statement.
"The Ecuadorian rider suffers from a significant contusion in his right shoulder, as well as several bruises, after a crash sustained in the Profronde van Etten-Leur criterium in the Netherlands, last Sunday.
"In spite of treatment received all week, and the lack of fractures, the injury needs more time to allow it to heal completely, which rules out his appearance in the race."
Movistar will now rely on 2009 winner Alejandro Valverde and Nairo Quintana, the 2016 champion.