Lofton was again on the move when on December 23, 2003, the New York Yankees signed him to a two-year, $6.2 million contract. During a Yankees' road game at Cleveland, Lofton recorded his 2,000th career hit. After Lofton's single, Indians fans began an ovation in honor of Lofton. "I didn't know what to expect. I figured I'd get a few claps. It was touching. I tipped my hat, but they just kept going. If there was a storybook way for me to get it, to get it in Cleveland, it was something to remember." New York finished the regular season with an AL-best record, 101–61. To begin the postseason, the Yankees defeated the Minnesota Twins, three games to one, in the 2004 ALDS. In the 2004 ALCS against the Boston Red Sox, the Yankees had built a 2–0 series lead when Lofton stated, "My ultimate goal is for me to try to win a championship. I'm at a point in my career – I've been here for 13 years, and gotten close. This is an opportunity for me to have a chance at it again." Then Yankees went up in the series three games to none before becoming the first team in MLB history to lose a series after holding a 3–0 series lead.