Saunders tossed 8 1/3 innings against the high-powered Yankees and left to a standing ovation in the ninth inning of the Angels' 5-2 win in front of 38,667 at Angel Stadium.
The 2008 American League All-Star allowed just two runs on six hits to improve to 5-0 with a 2.11 ERA in his past six starts since spending time on the disabled list with stiffness in his left shoulder.
"That's an extraordinary lineup that's very deep with power from both sides, so for Joe to go through them and make the pitches without too much run support was impressive," Angels manager Mike Scioscia said. "He didn't walk anyone and pitched deep in a game where we really needed it."
The win also trimmed the Yankees' lead over the Angels for the American League's best record to four games in the loss column.
And more importantly, the Angels' magic number to clinch the AL West is now at six, as the club maintained a 7 1/2-game lead over the Rangers in the division with just 11 games left in the regular season.
But Scioscia downplayed that magic number, diverting the attention to Saunders by asking, "How about magic Joe Saunders?" in response to a question about his club's magic number.
Saunders has certainly looked magical recently compared to how he pitched earlier in the year, when he battled through a knot in his left shoulder that didn't allow him to get full extension on his pitches.
When Saunders was placed on the disabled list after his start on June 11, he had a 5.33 ERA that is now down to 4.63 after six consecutive starts in which he has allowed two earned runs or fewer.
"I think it was just the confidence level in my shoulder -- to have the confidence to throw the ball the way I'm capable of throwing," Saunders said of his earlier struggles. "I was trying to fight through stuff but didn't have confidence to make the pitch I need to. But now, I'm throwing the ball well and I feel good."
Saunders' performance against the Yankees -- impressive as it was -- almost ended in the second inning, when he tweaked his left knee while coming up the dugout steps on the way to the mound.
But once he threw a few warmup pitches after getting Robinson Cano to ground into a double play, Saunders decided he was fine to pitch.
"It was weird," Saunders said of the injury. "I was coming up the dugout and jumped an extra step, and my patella tendon was tweaked a little bit. I could feel it pushing off the mound, but it didn't hurt me and I was able to fight through it."
By the time of his injury, though, Saunders had already received some early run support by Vladimir Guerrero and Torii Hunter, who hit back-to-back RBI doubles off left-hander Andy Pettitte in the first inning to give the Angels a 2-0 lead.
The Angels added to that lead with an RBI single by Erick Aybar in the fifth inning off Pettitte, who allowed three runs on five hits over six innings.
"They're a good team -- I gave them two runs early, and everybody they run out there is going to throw the ball well against you," Pettitte said of the Angels. "It's just frustrating I wasn't able to shut them down early and give us a chance to get the lead first."
The Yankees didn't get on the board until the seventh inning, when Alex Rodriguez hit his 26th home run of the season on a 1-0 curveball by Saunders.
But in the bottom half of the inning, pinch-hitter Kendry Morales followed with a solo home run of his own to give the Angels a 4-1 lead.
"It was good to see because he's really been pressing," Scioscia said of Morales, who is batting just .200 in September. "It was nice to see him square one up because he's been down for a long time."
Hideki Matsui added a pinch-hit homer of his own, connecting against Saunders in the eighth inning to bring the Yankees within two runs. It was as close as they would get, however.
Juan Rivera accounted for the final margin with an RBI double in the bottom of the eighth inning off Jonathan Albaladejo.
Saunders came out for the ninth inning and retired former teammate Mark Teixeira for the first out before giving up a single to Rodriguez. Saunders was then removed for closer Brian Fuentes, who allowed a deep fly ball to Nick Swisher that initially appeared to have home run distance but was caught by left fielder Reggie Willits at the wall. Fuentes then walked Jorge Posada before getting Cano to ground out to end the game and secure his 44th save of the season.
"Obviously, I want a complete game every time I go out there, so it was disappointing not being able to finish it," Saunders said. "But they're a good hitting ballclub, and we were able to get [Fuentes] in there to finish the game."
With the win, the Angels now have at least 90 wins for the seventh time in the past nine seasons. Next, if they can wrap up the AL West, they'll win the division for the fifth time in past sixth seasons.
"If we don't keep winning, it won't keep going down," said Chone Figgins of the club's magic number. "We have to keep winning because things can turn in a hurry."
Rhett Bollinger is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.