Verlander had a season-high nine strikeouts and Magglio Ordonez hit a two-run homer off Sabathia, leading the Tigers to a 4-2 win over the Yankees on Monday night for their third straight win.
"When he's ahead in the count, he's almost unhittable," Detroit catcher Gerald Laird said. "Tonight was the Justin we expect to see every night."
Verlander (1-2) pitched seven-plus scoreless innings, allowing seven hits and no walks.
The hard-throwing right-hander resembled the rising star he was in his first two seasons, not the pitcher who struggled last year and in his first four starts this season.
He hadn't pitched at least seven innings without giving up a run since late in the 2007 season.
"That's by far the best I've seen him throw," Yankees slugger Mark Teixeira said. "He was throwing 95 [mph] to 99 all night, and you just don't see many starters with that kind of velocity."
Verlander became the first pitcher in baseball history to throw a no-hitter, start a World Series game and be a rookie of the year and an All-Star in his first two full seasons.
Last year, he was 11-17 with a 4.84 ERA and was 0-2 with a 9.00 ERA in his first four starts this season.
The Yankees gave Sabathia a $161 million, seven-year contract last winter as a free agent, banking on him to stop skids.
They're still waiting.
Sabathia (1-2) gave up four runs and six hits as New York lost its fourth straight game to match the most consecutive losses it had last season.
Sabathia said it was "definitely" his best outing of the year and his manager agreed.
"I was attacking the zone and I was able to get swings early in the count," he said.
Detroit got to Sabathia right away with two hits in the first inning, including Miguel Cabrera's RBI single.
Sabathia was solid over the next four innings before allowing Curtis Granderson's bunt single, which he struggled to cover, Placido Polanco's double and Ordonez's two-run homer that bounced off the top of the right-field wall.
"He really only made three mistakes," Yankees manager Joe Girardi said. "The pitch to Polanco in the first, the pitch to Polanco in the sixth and the one to Magglio."
Verlander gave up a pair of singles to start the eighth and was replaced by Bobby Seay, who got out of the jam by getting Johnny Damon to pop up and Teixeira to hit a fly to the warning track before striking out Hideki Matsui.
Fernando Rodney entered in the ninth and after giving up three straight hits, including Nick Swisher's RBI single, he got bailed out by third baseman Brandon Inge, who charged across the infield to start up a double play on pinch-hitter Jorge Posada's grounder that scored a second run.
"[Inge] made a great play and [Polanco] made a great turn," Detroit manager Jim Leyland said. "Fortunately, you had the right guy running."
Rodney finished off the Yankees by getting Ramiro Pena to pop out, improving Detroit's home record to 5-1.
"If we keep putting guys on base, we'll start scoring runs," Girardi said. "We aren't doing it right now, but that will change."
Derek Jeter's first at-bat surpassed Mickey Mantle's Yankees record of 8,102. ... Detroit left-hander Dontrelle Willis, who is on the DL with an anxiety disorder, had a six-inning outing Sunday for Double-A Erie and is expected to pitch for Triple-A Toledo later this week. ... Yankees second baseman Robinson Cano extended his hitting streak to 14 games, one short of his career high. ... Posada played in his 1,500th game. ... Last year, the Yankees lost four straight once in May and once in August. ... Inge has reached base in each of Detroit's 19 games.