The top-ranked Spaniard was at his relentless best, whipping topspin forehands from corner to corner, as he beat the fourth-seeded Murray 6-4, 7-6 (6), 6-4 to move within one win of a second Wimbledon title and eighth Grand Slam championship.
Nadal will be a heavy favorite in Sunday's final against 12th-seeded Tomas Berdych of the Czech Republic, who defeated No. 3 Novak Djokovic 6-3, 7-6 (9), 6-3 to reach his first Grand Slam title match.
Nadal won Wimbledon in 2008, beating Roger Federer in an epic five-set final, but was unable to defend his title last year because of tendinitis in both knees.
By returning to the final in his fourth straight appearance, Nadal ended Murray's hopes of becoming the first British player to win the men's title since Fred Perry in 1936. No British man has even reached the final since Henry "Bunny" Austin in 1938, and British men have now lost in 10 Wimbledon semifinals since then.
Even with most of the 15,000-capacity Centre Court crowd willing Murray on, including David Beckham and son Brooklyn in the audience, Nadal was simply too strong and too determined to be stopped.
Nadal fell flat on his back at the baseline after Murray hit a forehand volley long on the first match point.
Nadal converted three of four breakpoint chances, while Murray broke just once. Nadal had 31 winners and only 13 unforced errors in the 189 points played.
"Very, very good match for me," Nadal said. "To beat Andy you have to play your best tennis always. He's a big challenge to play against. For me it's (an) amazing victory against one of the toughest opponents in the world."
After Nadal saved a set point in the tiebreaker and went up two sets to love, it was always unlikely he would let the lead slip. Even though he went down a break in the third set, Nadal fought back and ran off four games in a row to close out the match.
"For Andy it was important playing at home in Wimbledon," Nadal said. "That was a little bit more pressure than usual. But Andy's a very, very nice person and a very, very nice guy and I wish him the best of luck."
Nadal, who won his fifth French Open title last month, is aiming to win the French and Wimbledon back-to-back for the second time.
"Winning the last tournament at Roland Garros gave me a lot of confidence," he said. "I was a little bit more calm than usual here on (the) important points."
Nadal is 7-3 against Berdych, including wins in their last six matches.
"I played against him in the quarters in 2007, he's always a difficult opponent," Nadal said. "Big serve, very flat and powerful shots from the baseline. It will be very difficult."
The first set was decided on a single break of serve by Nadal in the ninth game. The Spaniard followed up a deep serve return with a forehand winner to set up break point, which he converted when Murray committed a forehand error. Nadal had only one unforced error in that set.
The second set was a compelling, high-quality affair with Murray holding the upper hand most of the way. Murray actually won more points in the set than Nadal 42 to 41.
Murray held at love in his first three serve games of the set and won 13 straight points on serve at one stage.
Murray held two break points at 4-3, but missed the first with a forehand serve return error after a mobile phone rang in the stands. After the point, he wheeled around to look into the crowd and gestured. On the second break point, Nadal forced the play with punishing forehands that forced a backhand error by Murray.
In the tiebreaker, Murray looked in a strong position after smacking consecutive aces of 125 mph (201 kph) and 133 mph (214 kph) to lead 5-4. When Nadal double-faulted, Murray held a set point on serve at 6-5. But Nadal attacked his second serve and then hit a perfect backhand crosscourt drop volley.
On the next point, Nadal hit a backhand passing shot that clipped the top of the net and skipped past Murray to give the Spaniard a set point. He converted with another big forehand that Murray couldn't reach. Murray bounced his racket on the turf in frustration.
Berdych, who upset six-time champion Roger Federer in the quarterfinals, kept up his sparkling run with a straigh-set win over Djokovic.
The 24-year-old Berdych is the first Czech to reach the men's final at the All England Club since Ivan Lendl in 1987. The only Czech to win the men's title was Jan Kodes in 1973.
"The feeling is absolutely amazing. It is really tough to describe," Berdych said. "Every young kid, from the first time he hits the ball and thinks to be a tennis player, this is the dream to be in the final of any Grand Slam. This is definitely the biggest tournament for me."
Berdych dictated most of the play with his big first serves and punishing forehand, and seized command of the match by winning a dramatic second-set tiebreaker.
Berdych lost serve just once in 16 games and broke Djokovic three times. The Czech had 11 aces, 34 winners and 17 unforced errors.
It was Berdych's first win over Djokovic after two defeats. Djokovic, winner of the 2008 Australian Open, fell short in his bid to reach a third Grand Slam final.
Djokovic hurt his own chances with eight double faults, including two in a row in the eighth game of the third set to lose serve and give Berdych the chance to serve out the match.
"He's just a better player today on the court," Djokovic said. "When I had the opportunities, I didn't use them. In important moments I served some double faults. I was a little bit unfortunate in some points. But definitely didn't take my chances and he used it, so he deserved to win."
The 70-minute second set was a mini-match in itself featuring some spectacular points, controversial calls, sudden changes in momentum and saved set points by both players in a rollercoaster tiebreaker.
With Berdych serving for the set at 6-5, Djokovic broke for the first time to set up the tiebreaker. Djokovic double-faulted to go down 6-2, handing Berdych four set points.
After saving the first three, Djokovic served at 5-6. He played tremendous defense on a rally of 23 strokes. Berdych hit a forehand and came to the net, and Djokovic flipped a lob that landed at the baseline but was called out. Berdych let up and casually hit the ball with his back to the net.
The video replay showed the shot was good, and chair umpire Carlos Ramos of Portugal ordered the point replayed.
"What do you mean?" Djokovic screamed at him, thinking he should be awarded the point. He protested only briefly, then won the replayed point with a backhand winner for 6-all.
Djokovic then had two set points himself but couldn't convert. Berdych saved one with a service winner and one with a big forehand.
With Djokovic serving at 9-10 Berdych's sixth set point he double-faulted. When Djokovic reached his chair, he knocked it over with a whack of his racket. The umpire gave him a code violation for racket abuse, and Djokovic applauded sarcastically.
"I thought at that moment the referee was wrong," he said. "I continued on playing. Maybe it would be a turning point if I won that second-set tiebreaker. Who knows? Maybe."