Moody (33) injured his knee in a match in January and missed all of the Six Nations but it was hoped he would be back for the first game of the World Cup for England.
But England coach Martin Johnson said yesterday that although the big loose forward had made progress, he was still not 100% fit for the first game of the World Cup for England.
"Lewis is not quite ready to go today. We hoped he would be fit to start training but he is not quite there," Johnson said.
"We have decided to hold him back a bit. These guys progress every day ... we hoped he would be ready to go today but he is a little bit short. We are very happy with the other guys and in the end it was a very simple decision."
Johnson and his side trained twice yesterday and would do so again at Carisbrook today as England looks to fine tune its team shape for the match against Argentina.
England would name its team on Thursday and Johnson said no other players were injured, with halfback Ben Youngs, who had been under an injury cloud, taking a full part in training. He did not confirm yesterday whether Mike Tindall, who had worn the captain's armband in recent internationals, would be the captain on Saturday.
The injury was not ideal for England but Johnson had full faith in the back-up.
"If we are in a World Cup and we were panicking about going into a game without someone then we would be in a bad place. At this point at the tournament if you are umming and ahhing about whether it is quite ready, that is just about getting him right for the next game."
Johnson said he fully respected the Argentinian side and saw it as a dangerous team, which did not mind what style it played as long as it won.
"They put you under tremendous pressure and are a difficult team to play against. I think for us it is about making sure we know what we are getting into.
"They can also play ... They are quite sharp and spot space. They can play chaotic rugby under turnovers and [are] quite dynamic ball-runners."
When asked about referees he just wanted consistency from the man in the middle.
"The tackle area is the key. The offside law is pretty black and white really. You either are or you aren't. Offside from kicks is another one. Scrum is a different area in itself. The breakdown is the key one.
"It is a very difficult area to referee and I think the way the rules are it is probably about right in terms of balance. We have to be smart and see what any individual referee on the day rules."
Johnson said he had spoken to referees boss Paddy O'Brien and had received assurances that there would be no radical changes than what had been officiated in the past months.
When asked if there were differences between referees from the northern and southern hemisphere, he said there were differences between officials from the same country.
"We all do the analysis. When you turn the balance of that tackle area slightly one way it has a huge effect on the game. It is a very, very delicate balance. I think we are in a pretty good place.
"But some referees will be a fraction one side and then some a fraction the other side, and you have to be able to deal with that."