The team announced the move and said assistant coach Kelvin Sampson will be in charge while McHale is out.
Sampson said McHale called him Saturday afternoon and asked him to coach the team.
"Hopefully whatever the family matter is, it gets taken care of," Sampson said. "That's the most important thing."
There is no timetable for the return of the second-year coach and Hall of Fame player.
Rockets general manager Daryl Morey didn't provide any further details on the specifics of the situation, but expressed his concern for McHale.
"Kevin is a devoted family man who is needed back home in Minnesota at the moment," Morey said. "The Rockets organization will keep Kevin and his family in our thoughts and prayers during this difficult time."
Sampson said he addressed the players in a film session Saturday afternoon and that he hopes they can use this setback as a positive.
"Oftentimes in life we have things happen to us, and we have to make decisions on how we're going to react to them," Sampson said. "This is one of those times. We lost our leader. I think we can use this as a catalyst to bring us together and fight for him."
Sampson was thinking more about McHale than worrying about his task of coaching Houston against the Pistons before Saturday night's game. He said the fact that there weren't high expectations for the Rockets entering this season makes stepping in easier.
"I don't think it's that challenging," he said. "We have a young team and we have a new team. I think it would be a lot more challenging if we were ... the No. 1 ranked team in the league. That might be a little more challenging. We're still growing."
Sampson is in his second season with the Rockets after spending three years as an assistant with the Milwaukee Bucks.