Posada sent a high fly to right off Jensen Lewis (1-2) with one out. Trevor Crowe leaped at the wall, but the ball was deflected by a fan and bounced off the top and back into play. Posada slowed his trot between first and second, looking out to right field, before he saw the homer signal from second base umpire Phil Cuzzi.
Crowe ran toward the infield indicating a fan interfered, and Indians manager Eric Wedge came out to dispute the call.
The umpires convened for several minutes near the mound before going to the video room through the visitors' dugout. They returned and summoned both managers to explain the decision.
Posada's homer capped the Yankees' three-run rally in the seventh. Robinson Cano led off with a double against reliever Rafael Perez, and Hideki Matsui hit an RBI single.
Lewis, who gave up Derek Jeter's go-ahead homer Friday, came on and after an out, Posada made it 4-3 to help make up for a wild outing by A.J. Burnett.
Posada's homer was the 20th at Yankee Stadium, the most ever in the first four games at a big league ballpark, according to the Elias Sports Bureau. The previous high was 16 in 1996, when Oakland opened the season at Cashman Field in Las Vegas.
Jonathan Albaladejo (1-0) came on with the bases loaded and one out in the seventh to get the win. Brian Bruney pitched the eighth and Mariano Rivera gave up a hit in the ninth to finish the four-hitter.
Cody Ransom added a three-run double in the eighth for New York off Rafael Betancourt to make it 7-3.
Shin Soo-Choo homered in the second inning, a day after he hit a three-run shot in a record 14-run second for Cleveland, and Ryan Garko hit a two-run shot in the third to temporarily take the focus of the boos off Pavano and onto Burnett, who walked seven and threw three wild pitches - but allowed only three hits.
Pavano was making his first start against the Yankees since the team declined the option on his $39.95 million contract after four miserable years. The 43,068 at Yankee Stadium let him hear how they felt from the moment he headed to the bullpen. When he was introduced, the closed captioned scoreboard read, "Carl Pavano, (crowd booed)."
Pavano silenced the surly crowd, retiring the first 10 Yankees before Jeter's liner to right-center fell for a double. Mark Teixeira drove him in with a sharp single to right with two outs in the fourth to make it 3-1.
Pavano gave up a run and four hits in six innings, his best outing for Cleveland. In two previous starts he had a 16.71 ERA.
Notes: Umpire Mike Estabrook filled in for Ed Hickox, who sustained a concussion during Saturday's game. Hickox will likely miss a week. ... Dr. Lewis Yocum will review the results of the tests on RF Xavier Nady's injured right elbow Monday before deciding what to do. Yocum performed reconstructive surgery on Nady's elbow in September 2001. ... With a nine-run inning Thursday and the big inning Saturday, the Indians became the first visiting team to score nine or more runs in an inning twice in the same series since the Tigers did it in 1907, when the Yankees were called the Highlanders and played at Hilltop Park in upper Manhattan.
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