New York, which got Hideki Matsui back from the 15-day DL, dropped 11 games back of Tampa Bay, the Yankees' largest division deficit this season. New York, whose streak of postseason appearances could end at 13, began the night 5½ games back of Boston in the wild-card race.
With the score tied 1-all in the eighth, Joe Inglett hit a two-out single to center field off Jose Veras (3-2). Scutaro followed with a deep drive to center. Damon, the center fielder, settled under the ball on the warning track, but it ticked off the top of his glove and off the wall, allowing Inglett to score.
Disgusted, Damon took off his glove and tossed it to the ground after throwing the ball to the infield. Damon was playing in center for just the 10th time this season. He also made 68 starts in left.
It was the second time in the game that Damon had a ball bounce off his glove. He also dropped Alex Rios' fly ball in the first and was charged with a two-base error.
Blue Jays stopper B.J. Ryan then got an assist from Overbay in closing out the Yankees.
Rodriguez led off the ninth with a flair down the right-field line that bounced off the turf and into foul territory. Overbay, chased the ball down, sliding on a knee to grab it before it went off the wall, and made a strong throw to second as he popped off the ground to nab A-Rod as he slid in head first.
Ryan got the final two outs without further trouble for his 24th save in 27 opportunities.
Burnett (16-9) allowed one run and five hits in eight innings and has won seven straight home starts. He struck out a season-high 13, the 21st time in his career he has posted double-digit strikeouts.
Matsui returned to the Yankees lineup after missing 50 games with a sore left knee. Starting as the designated hitter and batting seventh, he finished 0-for-3.
New York's Darrell Rasner, winless in six starts since beating Toronto July 12, blanked the Blue Jays through 6 1-3 before giving up a tying home run to Adam Lind in the seventh.
Damon scored the lone New York run in the first, leading off with a walk and scoring when Bobby Abreu lined a double down the third-base line.
Damon's first-inning error put Toronto runners at second and third with one out, but Rasner struck out Vernon Wells and got Lind to ground out.