Phillips was called up to the Yankees on June 19, 2007, after Phelps was designated for assignment. Throughout the 2007 season, Phillips became an important part of the team as a result of injuries to first baseman Jason Giambi and Doug Mientkiewicz. Due to these injuries, Phillips found himself used in the role of primary first baseman for the Yankees. He enjoyed great success through the months of July (hitting .320 with 16 RBI) and August (hitting .273 with 7 RBI). On September 2, while batting in the 5th inning against Devil Rays starter Jason Hammel, Phillips was hit on the wrist by a pitch. He would later leave the game and get an MRI and an X-Ray taken. It was announced on September 3 that Phillips had a fractured wrist and surgery would be required, needing 4–6 weeks, ending his season. Phillips was designated for assignment on December 3, 2007, to make room for Jose Molina. He cleared waivers on December 7, was offered an outright assignment to Triple-A Scranton, but declined the assignment and opted to become a free agent. In 2013, Andy appeared in the Old Timers Day game at Yankee Stadium.