Leiter was a prospect with the New York Yankees along with his brother Mark. Leiter made his major league debut as the starting pitcher for the Yankees on September 15, 1987, earning the win in a Yankees 4-3 victory over the Milwaukee Brewers at Yankee Stadium. Leiter struggled with blisters on his pitching hand to such a degree that the Yankees gave up on him at the age of 23 and dealt him to the Toronto Blue Jays for outfielder Jesse Barfield on April 30, 1989. Early in his Blue Jay career, he was able to overcome the blisters with an exotic liniment (that he used throughout his career) and was seen as a very promising prospect.