During the match against Kolkata Knight Riders on Wednesday, Mumbai Indians coach Ricky Ponting said that the West Indies player has been ruled out and Guptill will replace him.
Guptill went unsold in the IPL auctions that were held in February.
He has played in T20 leagues in West Indies (CPL), England (Natwest T20) and Australia (BBL).
Simmons injured his lower back, an injury that kept him out of the initial stages of World T20 as well.
In IPL 2015, Simmons had been Mumbai's best batsmen scoring 540 runs in 13 matches at a strike-rate of 122.41 with six half-centuries.
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