McCarthy's omission comes after he missed South Africa's two friendly matches against Norway and Portugal in March with a hamstring injury but was controversially back in action for English Premier League club Blackburn Rovers a few days later.
Capped 76 times, McCarthy has had a checkered international career scoring a record 31 goals for his country but falling out with coaches and officials on several occassions.
South Africa coach Joel Santana declined to discuss the omission but told a news conference on Thursday he believed he had selected the best available players.
South Africa host the Confederations Cup from June 14-28. They are grouped with Iraq, New Zealand, and European champions Spain.
The other group consists of world champions Italy, the United States, Brazil and Egypt.
Squad:
Goalkeepers: Brian Baloyi (Mamelodi Sundowns), Rowen Fernandez (Arminia Bielefeld), Moeneeb Josephs (Orlando Pirates), Itumeleng Khune (Kaizer Chiefs)
Defenders: Matthew Booth (Mamelodi Sundowns), Siboniso Gaxa (Mamelodi Sundowns), Morgan Gould (SuperSport United), Bongani Khumalo (SuperSport United), Tsepo Masilela (Maccabi Haifa), Innocent Mdledle (Orlando Pirates), Aaron Mokoena (Blackburn Rovers), Bryce Moon (Panathinaikos), Nasief Morris (Recreativo Huelva), Lucas Thwala (Orlando Pirates)
Midfielders: Lance Davids (SuperSport United), Kagisho Dikgacoi (Lamontville Golden Arrows), Benson Mhlongo (Orlando Pirates), Teko Modise (Orlando Pirates), Masilo Modubi (Westerlo), Surprise Moriri (Mamelodi Sundowns), Siyabonga Nkosi (Maccabi Netanya), Steven Pienaar (Everton), MacBeth Sibaya (Rubin Kazan), Siphiwe Tshabalala (Kaizer Chiefs), Elrio van Heerden (Club Brugge), Bernard Parker (Red Star Belgrade)
Strikers: Thembinkosi Fanteni (Maccabi Haifa), Mabhuti Khenyeza (Ajax Cape Town), Katlego Mashego (Orlando Pirates), Katlego Mphela (Mamelodi Sundowns).
