Baltimore jumped on the left-hander for six runs -- five earned -- before finally knocking Sabathia out in the seventh, putting him in line for just his second career loss in 19 starts against the Orioles.
Smarting from four losses to Sabathia already in 2010 and eight straight against the lefty overall, the Orioles mashed together a three-run first inning, with all of the runs crossing the plate before Sabathia was able to record an out.
"It just seemed he was a little off tonight," Yankees manager Joe Girardi said. "I didn't think he threw terrible. I just thought he wasn't quite down in the zone as much as we're used to seeing."
Brian Roberts led off with a single and scored on a Ty Wigginton bloop to shallow center field, and Adam Jones cashed Felix Pie and Nick Markakis with a two-run single, with Markakis sliding in safely when catcher Jorge Posada couldn't corral the throw.
Nolan Reimold blasted a two-run homer off Sabathia -- his third of the season -- with Wigginton aboard in the third inning, and Baltimore was pulling away. Even if Sabathia had been able to block out the images of No. 20, the Orioles weren't playing along.
"I saw that before the game, of course," Reimold said. "He's going to get 20 games, but we didn't want him to do it against us."
Sabathia settled in, retiring 10 straight at one point, but the Orioles got to the lefty again in the seventh inning, when Curtis Granderson couldn't snare a Josh Bell fly ball and Markakis slapped the hurler's 109th pitch into left field for a broken-bat RBI single.
"You've heard a million times, 'You've got to do something a little early and get him deeper into some pitch counts,'" Orioles manager Buck Showalter said. "This guy is a lot more of a pitcher than people give him credit for. He's athletic. We made him get to the repertoire a little earlier."
Sabathia allowed nine hits, walking one and striking out five. He had won each of his last six starts at Yankee Stadium and came into Tuesday's game 13-1 with a 2.59 ERA in 18 career starts against the Orioles.
"I'm more concerned with us losing. That means more than any personal streak," Sabathia said.
The Yankees got to Orioles right-hander Jake Arrieta for two runs on eight hits in 6 1/3 innings, as the young hurler wobbled at times but ultimately pieced together a strong outing.
"He threw the ball well," said Yankees shortstop Derek Jeter, who was 1-for-4 with an infield single. "Early on, we hit a lot of balls hard, and I think we hit a lot of balls right to some people. After that, he settled down there, worked quick and threw strikes. We didn't get too much going."
Brett Gardner started up New York with a first-inning bunt and scored around on a Robinson Cano hit, denting Baltimore's early advantage.
The Yankees moved a second run around in the fifth, when Posada blasted a double to left-center with no outs. Third-base coach Rob Thomson waved slow-footed Lance Berkman toward the plate, where he beat the throw with a clumsy but effective slide.
"We hit some balls hard tonight and didn't have a lot of luck," Girardi said. "And that's going to happen."
New York had a solid shot for damage in the seventh, when Alex Rodriguez pinch-hit with runners at the corners and one out, following a booming Berkman double and a fluke play in which a Granderson popup fell in but resulted in an out.
But Matt Albers got Rodriguez to line hard into a fielder's choice, the ball bouncing off Bell's glove at third base before being recovered by shortstop Robert Andino for a force play, and Gardner bounced out to end the inning.
"I was telling a friend after I came out, I never heard a crowd get as loud as it did when they pinch-hit A-Rod there in the seventh," Arrieta said. "I wanted to face him, but Matty did a great job."
Having also won 19 games in both 2007 and '09, Sabathia had just one previous chance to be a 20-game winner, making his final start of the season last Oct. 2.
But the Rays knocked Sabathia out of that game after he'd allowed five runs in just 2 2/3 innings, leaving the ace with a record of 19-8 heading into the postseason.
This time around, Sabathia seems to be a near-lock to clinch the milestone, having the entire month of September to post another in the "W" column. But those opportunities come as Sabathia would much rather see the Yankees pad their lead in the American League East, which dropped to 1 1/2 games with the Rays' 14-5 win over the Red Sox in Boston.
"We're still in the race, still trying to win the division, and I think that's the most important thing," Sabathia said.