Yes, the Yankees and Mets' Subway Series has been a matchup in the World Series. It only happened once, though, which came in the 2000 season when the playoff format featured fewer teams.
When the Yankees beat the Mets in the 2000 World Series, clinching in Game 5 at old Shea Stadium as Jeter took MVP honors, it was the 14th Subway Series in New York City but the first since 1956 ...