The 14-time Grand Slam winner saved all four break points he faced and converted two of his own to beat the fourth-seeded Monfils of France in 1 hour, 19 minutes. Monfils lost despite serving 11 aces compared to none from Nadal.
Nadal, who was made to work hard against Bernard Tomic and Marcos Baghdatis in the previous rounds, says it was his "best match so far. I am very pleased with my performance."
Nadal will face the eighth-seeded Viktor Troicki of Serbia or second-seeded Marin Cilic of Croatia in Sunday's final.
The Spaniard is looking for his third title at the tournament after victories in 2005 and 2007 when it was still on clay.