The Thornhill, Ont., native advanced to the final with a 6-4, 6-2 win over third-seeded Sam Querrey on Saturday.
Raonic, undefeated in San Jose, is attempting to become the first player in the Open era began in 1968 to win here three consecutive years, and the first overall since Tony Trabert did it between 1953-55.
Raonic will next face Tommy Haas for the first time. Haas advanced with a 6-3, 6-4 win against John Isner.
The 13th-ranked Raonic recorded 12 aces in his match against Querrey and won 88 per cent of his second serve points.
"I've been going up and down in regards to my return," Raonic said. "I started aggressively and carried that through the match. I'm returning well, moving well and serving well, the whole thing. Everything is on the right track and that gives you confidence that all the work is paying off."
Raonic leads the tournament in service games won (31 of 31), first serve points (90 per cent) and has 39 aces.
Querrey said the inability to handle Raonic's serve made all the difference.
"He's the only guy in the field who has been over 140 (m.p.h.) on his serve consistently all week," Querrey said. "Even if you can get your racket on it, you might not get it clean. You try to get the ball in play and go from there. I wasn't even close to getting to it."
Haas meanwhile reached his first final in six months.
"Numbers and rankings don't mean as much to me as reaching the final of a tournament," Haas said. "At my age, you're always looking for another title. Hopefully I can play well again tomorrow."
The 22nd-ranked Haas made his debut in San Jose in 1998 and reached this final for the first time. He played in just his second semifinal, his first since 2005.
"It's a tough sport, it's a grind," Haas said. "Moments like this, when you're on such a high winning these matches, make you appreciate all the hard work you put in. You never know. It can be easy to just say, 'Oh, maybe next week.' Mentally I thought I can still achieve something and that has kept me going."
The 34-year-old German qualified for his 25th career final and will be looking for his 14th career title.
"You can always improve your game," Haas said. "You might start thinking that all these younger guys have passed you by, but you can help your all-around game. That's what you have to keep thinking."
Isner, who missed the Australian Open because of a bruised right knee, was successful on just 58 per cent of his first serves.
"Normally I can serve better than how I did," Isner said. "That's what decided the match. He played a lot better than I did. He didn't miss too many serves. He was very good."