In reality, part of his decision stemmed from the fact that he didn't feel as though the Yankees wanted to keep him, as the Astros pursued him with much more vigor than the team with which he had played his entire career.
Three years later, Pettitte is back with the Yankees, who made sure not to let history repeat itself.
The Yankees reintroduced Pettitte in a conference call on Thursday, officially announcing his one-year, $16 million deal. The contract also includes a player option for 2008 at another $16 million.
"We stepped up and tried to make sure he understood this wasn't just going through the motions," general manager Brian Cashman said. "We were serious about trying to bring him back to the fold and hopefully have him finish up his career with the Yankees."
As recently as mid-November, Pettitte had been contemplating two options as he embarked on the free-agent market: re-sign with the Astros or hang up his spikes for good. But after attending Joe Torre's charity dinner, which featured a reunion of the 1996 Yankees, Pettitte began to consider a third option, which was to return to New York.
"I got to see a bunch of the guys, and they were talking to me about coming back," Pettitte said. "At that time, there was no chance. In my mind, it was Houston or retiring. It wasn't in my mind to return to New York, but all the guys were talking to me about it. I kind of just smiled at them."
"Coming back to the New York scene and seeing a lot of his former teammates," Cashman said, "I think that probably rustled up some of the emotions of what it was like for him when he was playing here."
Of course, the question of Houston or New York couldn't be settled until Pettitte decided whether he was going to play at all.
Following the 2005 season, in which his Astros reached the World Series, it took Pettitte almost two months for his arm to feel normal again. The wear and tear on his arm had taken such a toll, he assumed that 2006 would be his final season.
But after this season came to a close, Pettitte found himself feeling better than he had anticipated. He felt no fatigue while tossing a football around at his son's practice, making him believe that he could return for another year of pitching.
"I thought my elbow would be giving me a lot of trouble, and I bounced back really good at the end of the year this year, unlike last year," Pettitte said. "I feel no different than I would in a normal offseason."
With his mind made up to pitch, he now had to decide which team he would play for. That's when the Yankees put on "the full-court press" with him, trying to convince him to return to his original baseball home.
Pettitte sat down with his wife, Laura, and their children, to discuss his future. He listened closely to his son, Josh, who is now in junior high school, to hear his thoughts on the idea of going back to New York. The whole family gave Pettitte the thumbs up, telling him to go back to the Yankees if that was where his heart was pointing him.
"Once I got the green light from them, and once the offers were made, it was just a matter of me making up my mind of what I wanted to do and what I felt in my heart I should do," Pettitte said. "I felt like New York was where I wanted to play next year. That's really what it came down to."
The Yankees were more than willing to accommodate Pettitte, who won 149 regular-season games, 13 postseason games and four World Series rings during his first stint in pinstripes.
Unlike three years ago, when the Yankees waited in the wings while the Astros courted Pettitte, New York became aggressive with the left-hander. Cashman had Torre place a call to Pettitte, while former teammates such as Derek Jeter reached out to the pitcher as well.
He was offered a deal for $16 million (the Astros' best offer had been $12 million), with the player option for 2008. For Pettitte, the player option was a more attractive option for him than a guaranteed two-year deal, as he isn't sure what he will want to do after the upcoming season.
"If I signed a straight two-year deal with somebody, I knew that I would try to pitch that second year, no matter what," Pettitte said. "I didn't want to be obligated to an organization paying me a lot of money. If I felt at the end of this year that it was all I had left in the tank, I wanted to be able to shut it down.
"I didn't want to be a free agent again; the two times I've been a free agent, it's been a nightmare for me trying to decide what I wanted to do," he continued. "Most people like being a free agent, but it absolutely drove me crazy. I wanted the chance to say I would retire or to activate an option. If I feel like I can pitch and I want to continue after this year, and I feel like I'll be able to help the New York Yankees, then I'll continue to pitch."
While player options for that much money are uncommon, Cashman has enough trust in Pettitte -- and wanted the pitcher to return to New York badly enough -- that it was not an issue for the Yankees to include the option in the contract.
"Houston is his home; he's had a great deal of success down there and was part of championship efforts down there, and it's hard to uproot somebody from that," Cashman said. "We obviously had to differentiate ourselves to some degree in our efforts to secure him compared to other alternatives on the market."
Pettitte is expected to join Mike Mussina, Chien-Ming Wang, Randy Johnson and either Carl Pavano or Kei Igawa -- whose contract should be made official next week -- in the starting rotation.
The Yankees haven't won the World Series since 2000, and they haven't reached the Fall Classic since 2003, which was Pettitte's last season with the club. He knows that the goal this year will be to snap those streaks, and he's looking forward to the challenge of adding a fifth ring to his collection.
"I'm going to do everything I can possibly do to help this team be successful and get back to the World Series," Pettitte said. "That's the goal. Anything short of that is going to be a failure. I know it's been a failure during the last three years that I haven't been there, so that's what you have to shoot for."
Although Cashman wouldn't say he regretted letting Pettitte leave three years ago, he made it clear that he was happy to have him back in the fold.
"He opted for the pull of being home at that time, but we're excited for the chance to have him, because we consider this his baseball home," Cashman said. "With all due respect to what he's done in Houston the last three years, he's home grown, he was drafted by us, developed by us, he won world championships and obviously was part of teams that fell short with us. There's a lot of history, and great moments that we recall."
"You spend nine years in New York and do the things that we've done, winning all the championships and went to the World Series like we did, there's obviously a special place in my heart for New York," Pettitte said. "I guess that was the ultimate factor that drew me back there."
Mark Feinsand is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.