Molina, 32, will back up Jorge Posada in the Bronx, serving in the same role he was playing for the Angels with Mike Napoli having emerged as the everyday catcher.
Jeff Mathis, 24, and a first-round pick in the 2001 First-Year Player Draft, inherits Molina's role as Napoli's backup.
"These guys are going to do the same job I did," said Molina, who backed up brother Bengie in 2002 when the Angels won the franchise's first World Series title. "They're going to battle their [fannies] off here. They've got a great manager [Mike Scioscia] who is going to push it to the limit. They're good guys, good players. It's a chance for Mathis to stay here.
"I'm disappointed a little bit. I wanted to stay here. I'm not selfish. There's one thing you can't control."
That would be the business side of the game.
"It's a shock for anybody when they're traded," Scioscia said. "It definitely is part of the game. This is a good opportunity for Jose, going to an organization, the Yankees, that's an incredible organization. He'll play well."
Angels reliever Scot Shields expressed the sentiment of teammates who held Molina in the highest regard as a teammate.
"Jose's been my catcher the last six, seven years," Shields said. "It's going to be tough. But we have two guys who can get the job done."
With Bengie Molina in San Francisco, the Molina era in Anaheim comes to a close. Jose, whose strengths are his defensive skills and rapport with pitchers, is batting .224 this season with no homers and 10 RBIs in 40 games. He's a .237 career hitter with 15 homers and 98 RBIs in 373 games with the Angels.
"We're all proud of the way Jose played for us," Scioscia said. "It was fun to have his brother here. They fed off that. A player moves on; you've been close a number of years, a little piece of you goes with him."
Mathis, batting .154 in seven games, drew raves for his defense at Triple-A Salt Lake this season. Hailing from Marianna, Fla., Mathis batted .145 in 23 games with the Angels last season.
"With Jeff Mathis' development," Scioscia said, "we feel Jeff's going to bring something to help us on the Major League level. Jose played great baseball for us. We feel the time is right for Jeff."
Scioscia said Angels general manager Bill Stoneman has excellent reports on Kennard, who has a 1-4 record and 2.73 ERA in 31 games for New York's Double-A Trenton affiliate. A Centerville, Ohio, native drafted in the 40th round of the 2000 First-Year Player Draft, Kennard came into 2007 with a 26-17 record and 3.01 ERA in the Minors, having yielded only 18 homers in his professional career.