Standing between Djokovic and a record shared by some of the greatest players of all time will be No. 2-ranked Rafael Nadal, a man he beat in six tournament finals in 2011.
Despite appearing tired and sore from the second set, the defending champion rallied to beat fourth-seeded Murray 6-3, 3-6, 6-7 (4), 6-1, 7-5 in a rematch of the 2011 final at Melbourne Park.
After wasting a chance to serve out the match at 5-3 in the fifth and letting Murray back into the contest, Djokovic cashed in his first match point when the Scottish player missed a forehand after four hours 50 minutes.
"You have to find strength in those moments and energy, and that keeps you going," Djokovic said. "I think we both went through a physical crisis. You know, him at the fourth set, me all the way through the second and midway through the third. It was a very even match throughout, from the first to the last point."
Djokovic dropped onto his back, fully laid out on the court. He got up and shook hands with Murray, before jogging back out onto the court like a boxer, dropping to his knees and crossing himself.
It was already after 12:30 a.m. Saturday when he got up again and pumped his arms triumphantly.
"Andy deserves the credit to come back from 2-5 down. He was fighting. I was fighting," Djokovic said. "Not many words that can describe the feeling of the match.
"Evidently it was a physical match ... it was one of the best matches I played. Emotionally and mentally it was equally hard."
In junior boys play, Vancouver's Filip Peliwo advanced to the final with a 6-4, 6-4 win over American Mackenzie McDonald. The 17-year-old Peliwo is the first Canadian since 2006 to reach a junior Grand Slam singles final. He will meet No. 1-ranked Luke Saville of Australia in the final. Peliwo defeated Saville last week to win the Traralgon International.
Second-seeded Eugenie Bouchard of Montreal lost her girls semifinal to fourth-seeded Russian Yulia Putintseva 7-5, 6-1.
It was a bitter setback for Murray, who lost the previous two Australian finals and is still trying to end a drought for British men at majors dating back to 1936. He is confident he has already improved in the few weeks since hiring eight-time major winner Ivan Lendl as coach.
"Yeah, it was tough at the end 'cause, you know, obviously you come back, then you get close to breaking," he said. "To lose, yeah, it's tough.
"But a different player, a different attitude to this time last year. I'm proud of the way I fought."
Djokovic finished last year at No. 1 after winning three of the four majors, including a straight-sets win over Murray in the Australian final. His only loss at a Grand Slam in 2011 was against Roger Federer in the French Open semifinals.
It was phenomenal season after previously only winning one major — the 2008 Australian Open — and not returning to a final for 11 Grand Slams.
"To be honest, I think I matured as a player. I started to believe on the court I could win majors," he said. "Rafa and Roger are the most dominant players for the last seven, eight years. ... It was very hard to take away the titles from them. They will not give you the titles. You have to earn it."
He is now aiming to be only the fifth man in the Open Era started in 1968 to win three straight majors — only Rod Laver, Pete Sampras, Federer and Nadal have achieved it before him, with only Laver going on to complete the Grand Slam by winning all four majors in a season.
The Australian great was in the arena named in his honour to watch Friday night's semifinal, as he had been when 2009 Australian Open winner Nadal came back from a set and a break down to beat four-time champion Federer in four sets the previous night.
Djokovic's 70-6 win-loss record in 2011 included those six wins over Nadal in finals — including Wimbledon and the U.S. Open. Nadal has had an extra day to prepare for the final, but will be conscious of his own performance three years ago when he beat Fernando Verdasco in a 5-hour, 14-minute semifinal and had 24 hours less to prepare for a final against Federer that he eventually won.
On Friday night, both Djokovic and Murray had form dips — but Djokovic's were more obvious. He led by a set and a break before Murray started coming back at him. Then Djokovic started walking gingerly and appeared to be struggling for breath — just as he had been in his straights sets quarter-final win over No. 5-ranked David Ferrer.
At one point, he pointed to his nose and seemed to indicated to his support group that he was having trouble breathing.
He stayed in the points, despite Murray scrambling and trying to get him involved in long rallies.
"You try to get energized in every way," he said. "A lot of liquids, try to eat something, as well, that gives you energy."
He put his breathing problems down to allergies, and said he'd seen a doctor for it.
After winning a tight tiebreaker but then virtually conceding the fourth set, Murray rallied again after slipping behind 5-2 in the fifth. He broke Djokovic at love when the Serb was serving for the match on a three-game streak that put all the pressure back on the defending champion.
But Djokovic composed himself and seemed to be gathering energy as the match wore on. He held serve and then broke Murray to finish it off.
"I'm extremely delighted to be in the final," Djokovic said. "What can be a bigger challenge than playing against Rafa Nadal, one of the greatest players ever.
"I'm going to try to recover. Obviously it's going to be physical as well."
Despite being friends and childhood rivals, this was only the second meeting between Djokovic and Murray at a Grand Slam. Djokovic beat Murray in the 2011 Australian final and had a 6-4 lead in their overall head-to-heads at tour level.
Murray won the Brisbane International and came into the semifinal on a 10-match winning streak.
The blue-and-white crossed Scottish flags fluttered in the crowd, held by fans with the flag painted on their faces and some wearing their tartan Tam hats. The support was evenly split at Rod Laver Arena, encouraging both players in the tense final set.
The Maria Sharapova vs. Victoria Azarenka women's final on Saturday night is being previewed in the local media as a battle of the two loudest grunters on the tour. Azarenka, who won the Sydney International title the weekend before the season's first major, is bidding to continue her winning shriek.
Sharapova has won three majors, but none since the 2008 Australian Open. Azarenka will be playing her first Grand Slam final.
The winner will move to the top of the women's rankings. Caroline Wozniacki, who came into the tournament as No. 1, will drop three places after her quarter-final loss to 2011 champion Kim Clijsters.
Russians Svetlana Kuznetsova and Vera Zvonareva won the women's doubles final on Friday with a 5-7, 6-4, 6-3 victory over the Italian duo of Sara Errani and Roberta Vinci.
Bethanie Mattek-Sands and her Romanian partner Horia Tecau advanced to the mixed doubles final with a 6-3, 6-3 win over Indian pair Sania Mirza and Mahesh Bhupathi. They'll next play Elena Vesnina of Russia and India's Leander Paes.
In the men's doubles final Saturday, American twins Bob and Mike Bryan are aiming for a Grand Slam record 12th major when they take on Leander Paes and Radek Stepanek.