Phelps kept up his strong spring training, allowing three hits over five innings in Sunday's 3-0 win over the Toronto Blue Jays.
"Phelps' command has been very good," Yankees manager Joe Girardi said.
Phelps, a 26-year-old right-hander who went 4-4 as a rookie last year, has given up one run in 14 innings over four starts.
"Everything was working," said Phelps, who struck out three and walked one.
Phelps is competing with Ivan Nova to be a starter and could win a rotation role if Phil Hughes doesn't recover from a back injury by the first week of the season. Diagnosed three weeks ago with a bulging disk in his upper back, Hughes is set to throw 25-to-30 pitches off a bullpen mound Monday. He had a 10-pitch mound session Saturday.
"We believe that Phil's probably going to be ready," Girardi said.
Blue Jays left-hander J.A. Happ allowed four hits in 3 1/3 scoreless innings. He appears to be the odd man out to win a spot in Toronto's revamped rotation that includes offseason acquisitions R.A. Dickey, Mark Buehrle and Josh Johnson.
"It's very frustrating," Happ said. "I told myself a couple things before coming into camp that I would try to stay as positive as I could, and just kind of let things play out. I'm trying to do that."
Happ's role to begin the season could be as a major league reliever or a starter at Triple-A.
"I'm a major league starting pitcher," Happ said. "We'll have to let it play out."
Toronto manager John Gibbons understands Happ's frustration.
"I definitely feel for him," Gibbons said. "He knows what he's facing. Before it's all said and done, he's going to help us in a lot of ways."
CC Sabathia, the Yankees' expected opening-day starter, threw 52 pitches during a simulated game at Steinbrenner Field in Tampa. The left-hander, who had offseason left elbow bone spur surgery, is scheduled to make first exhibition start Friday against Miami.
"I had no pain, no problems," Sabathia said. "Felt like I was throwing a little harder than last time. I'm ready to go."
Girardi said Kevin Youkilis will play a game at first base this week. Signed to fill in at third base while Alex Rodriguez recovers from hip surgery, Youkilis could side time at first while Mark Teixeira recovers from a wrist injury expected to keep him sidelined until at least May.
Rodriguez had hip surgery in January and might return around the All-Star break.
Youkilis stopped an 0-for-9 start with a first-inning double, and finished 1 for 2 with a walk.
New York also is looking at Cuban infielder-outfielder Ronnier Mustelier at third. Rivera played first on Sunday.
Toronto third baseman Mark DeRosa made a nice play along the foul line and then threw out Jose Pirela at first with the bases loaded and two outs in the fourth. Anthony Gose made a ninth-inning diving catch in center to take a hit away from Addison Maruszak.
New York's Brett Gardner walked in the fifth. He has reached base safely in all 10 of his exhibition games.
Yankees captain Derek Jeter (ankle surgery) is scheduled to DH for the second time Monday. The shortstop, who made his initial exhibition appearance Saturday, might play in the field Wednesday. ... Toronto RHP Brandon Morrow is to pitch in a minor league game Tuesday. ... New York LHP Andy Pettitte is to make his 2013 spring training debut Wednesday night. ... Yankees reliever Boone Logan (sore elbow) threw 10 pitches off a bullpen mound. ... Toronto optioned LHP Evan Crawford and C A.J. Jimenez to Double-A New Hampshire.