Though the stars who have met in eight Grand Slam finals were playing in a semifinal for the first time at a major since 2005, they played as if the title were at stake.
This time, though, only Nadal will have the opportunity to win another championship — on Sunday night when the Spanish left-hander plays the winner of Friday's semifinal between defending champion Novak Djokovic and Andy Murray.
Earlier Thursday, Maria Sharapova overcame Petra Kvitova to advance to the women's final against Victoria Azarenka. Sharapova broke Kvitova's serve in the last game to finish off a 6-2, 3-6, 6-4 win and third-seeded Azarenka beat defending champion Kim Clijsters 6-4, 1-6, 6-3 to set up a Saturday night final at Rod Laver Arena that also will decide the No. 1 ranking.
Nadal, who holds a 6-2 edge in Grand Slam finals against Federer, made the key service break in the ninth game of the fourth set, making an incredible crosscourt forehand winner from well behind the baseline, then watching as Federer hit a backhand wide to give him a 5-4 lead.
Serving for the match, Nadal moved two points away from the win when a Federer backhand went long. He won on his second match point when a Federer forehand floated long.
At the end, Nadal smashed a ball up high in the stadium, almost clearing the roof. He then applauded along with the crowd when Federer walked off.
Two weeks ago, Nadal injured his right knee and wasn't sure he'd be able to start the tournament. Now, he can barely believe he's in the final.
"If you tell me that two Sundays ago, I really cannot imagine," Nadal said. "For me, it's a dream to be back in a final of the Australian Open."
The 25-year-old Spaniard won the 2009 Australian title but lost in the quarterfinals in his next two trips to Melbourne Park. Federer hasn't added to his record 16 Grand Slam titles since he won the 2010 Australian Open.
When the often enthralling play was suspended for 10 minutes late in the second set for an Australian Day fireworks display, Federer seemed to be affected most. Nadal led 5-2 at the time, and Federer lost his serve in the next game to give the Spaniard the set. In all, he dropped 11 points in a row.
The capacity, 15,000-strong crowd was evenly split in its support, with the names seeming to blur after the R in rival chants.
Each time somebody called out for Rafa, it was met by a response for Roger. The cheers were just as loud for Nadal's scrambling, sometimes astonishing, passing shots as for Federer's deft winners.
With the players on serve in the second set, Nadal went so far wide on a Federer return that he was near the side wall of the arena. Incredibly, he stretched wide and returned the ball crosscourt for a winner. That set up three break points and Nadal clinched the game to take a 4-2 lead in the second set.
Federer saved a set point in the 11th game of the third set that eventually forced a tiebreaker. But Federer made three unforced errors in the tiebreaker to give Nadal a 6-1 lead, and the Spaniard eventually clinched the set on his last opportunity of five set points.
"Please win the point, that's all," Nadal recalled when asked what he was telling himself. "I was very, very nervous at that moment. Losing four set points in a row is tough, especially when you play the toughest in history."
Kim Clijsters was in the crowd, only hours after her title defence ended. And Ivan Lendl was at Rod Laver Arena for a second night, scouting opponents again as Murray's coach. So were former Australian greats Laver and Ken Rosewall.
Sharapova lost to second-ranked Kvitova in the Wimbledon final last year, her first major final since returning from an injury layoff following a shoulder operation in 2008. She has won three majors, but none since the Australian four years ago.
"In the third set, I felt she always had the advantage because I was always down on my serve," said Sharapova, who served five double-faults in the third set and 10 in the match. "I just told myself 'You just gotta go for it, don't let her finish off the points like she likes to.'"
Azarenka won the first semifinal after twice recovering from periods when a resurgent Clijsters seemed to have the upper hand, to secure victory in only her second appearance in a major semifinal.
"I felt like my hand is about 200 kilograms and my body is about 1,000 and everything is shaking, but that feeling when you finally win is such a relief. My God I cannot believe it's over. I just want to cry," Azarenka said as she choked back tears, then buried her face in a towel.
"It was just trying to stay in the moment. Kim really took over the second set and I felt there was nothing I could do. I just tried to regroup."
Clijsters is popular in Australia, where she's widely known as "Aussie Kim." She had most of the backing from the crowd on the national holiday in what is likely to be her last Australian Open.
Azarenka held her nerve despite the crowd and the fact she was up against a proven big-match player. Clijsters has won four majors and has defended a Grand Slam title — winning the U.S. Open in 2009 and '10. To reach the semifinals, the Belgian saved four match points despite a sprained ankle to beat French Open champion Li Na in the fourth round and then beat top-ranked Caroline Wozniacki in the quarterfinals.
"I guess before you all thought I was a mental case," Azarenka said in a courtside interview. "I was just young and emotional. I'm really glad the way I fight, that's the most thing I'm really proud of. I fight for every ball."
Clijsters credited Azarenka with increasing maturity.
"The match was very close. There were a few deciding moments where I think I maybe had a little bit of an advantage, in the third set, especially that first game where I had break point," Clijsters said. "But she definitely played really well. So she deserved to win at the end."
Wozniacki will vacate top spot in next week's rankings after her quarterfinal loss, leaving either No. 3 Azarenka and No. 4 Sharapova to move to the top.