With his new team, Ruth set about rewriting the record books right away. In the 1920 season, he dwarfed his 1919 totals by belting 54 home runs and recording 142 runs batted in (RBI). He kept up his torrid pace overall, hitting .376 for the season, with 150 walks. His home run total, 54, nearly doubled his own record-setting total of the year before and was, by itself, more than the team total of all but one team (the Philadelphia Athletics) in both the American League and the National League. Even with those totals, though, Ruth's Yankees didn't win even the American League, finishing third behind the eventual world champions the Cleveland Indians.

Ruth made more of a statement the following year, the first of three straight World Series appearance for the Yankees. In 1921, Ruth hit .376, with 59 home runs, 171 RBI, and 145 walks. The Yankees did win the American League pennant that year, with a 98-55 record, but lost the World Series to the New York Giants.

The same two teams met again in the World Series the following year, after Ruth had suffered a bit of a down year (.315, 35 HR, 110 RBI), and the Giants won again.

In 1923, though, things were different. The Yankees had moved into a new stadium, which came to be known as "The House that Ruth Built." That year, Ruth recorded his highest batting average ever, a .393, and blasted 41 home runs and recorded 131 runs batted in. The Yankees finally beat the Giants in the World Series. It was the beginning of a dynasty.

The Yankees had been building a team around Ruth, and these efforts showed most dramatically in the 1927 season, when the Yankees won 110 games and the World Series. Ruth hit 60 home runs that season, a total that would stand for 34 years, until fellow Yankee Roger Maris broke the record in 1961. The 1927 Yankees team was loaded with talent in hitting, pitching, and fielding. The batting lineup known as the "Murderer's Row" also featured Lou Gehrig, Tony Lazzeri, Bob Meusel, and Earle Combs, and scored 975 runs, while allowing only 599. It was one of the most dominating performances in baseball history.

Ruth and the Yankees continued to win and win big. They won the World Series the following year, becoming the first team to sweep their opponents two years running. They won many more games and one more World Series during Ruth's career, which ended in 1935. (He played part of a final season with the Boston Braves.) His career total of 714 home runs was considered unassailable until Hank Aaron broke it in 1974.

After the 1934 season, Ruth's last with the Yankees, he and several other famous ballplayers went on a "barnstorming" team in Japan, where baseball had also become popular. Japan formed its own pro baseball league two years later.

He was one of the first players elected to the Baseball Hall of Fame, which opened in 1936. The others inducted that year were Ty Cobb, Walter Johnson, Christy Mathewson, and Honus Wagner.