Encarnacion's blast, his 30th of the year, put the finishing touches on the big frame, which saw the Blue Jays stake out a 7-0 lead. The Blue Jays designated hitter finished the day 3-for-4.
Davis later added a bases-clearing two-bagger to end with five RBI while Moises Sierra chipped in with three hits for Toronto, which took the rubber match of a three-game series.
J.A. Happ (1-1) collected his first victory as a Blue Jay, allowing four runs on six hits over 5 2/3 innings, striking out four and walking none.
Yankees starter Phil Hughes (11-10) was bombed for seven runs on nine hits over four full frames.
Derek Jeter went 3-for-4 with a solo homer and two RBI for the American League East-leading Yanks.