Top-seeded Serena dispatched No. 4 Lindsay Davenport, 6-3, 7-5, after second-seeded Venus held off No. 10 Amelie Mauresmo, 6-3, 5-7, 6-4, in the U.S. Open women's semifinals.
The sisters will square off in Saturday night's championship match for the third straight Grand Slam and the fourth time in the past five majors.
Venus defeated her younger sibling in the championship here last year, the first time sisters had met in a Grand Slam final since Wimbledon in 1884, when Maud Watson beat Lilian Watson.
Serena countered with victories in the finals at the French Open and Wimbledon. In addition to unseating Venus as champion at the All-England Club, she also grabbed her sister's No. 1 ranking. The winner of Saturday's prime-time match will be atop next week's rankings.
"It would be real nice (to regain the No. 1 ranking)," Venus said. "I've played really good for the last couple of years and it seems like I can't get to that No. 1 ever -- or just stay there. So it would be nice to definitely be on top."
Venus leads the series, 5-4, but is 0-3 against Serena this year. She also lost to her sister in the semifinals at Miami in April.
"The last few years, it's all kind of gone my way most of the time," said Venus, a four-time Grand Slam winner. "So maybe it's something that I expect it to go my way, but it doesn't always. Sometimes you have to work a little bit harder. Hopefully, there's a little extra in the tank."
Asked to comment on her sister's game, Venus said, "It's really easy to play well after you've won two Grand Slam titles and your confidence is at an all-time high. I've been there and I've done that before. You feel pretty much like you can do anything."
"I want to win more than anything," Serena countered. "It's been three years since I won the U.S. Open. I like winning here. I was able to win on grass and on the clay. After the Australian, I said last year I need to win the French, Wimbledon and the U.S. Open. It's all happening, so we'll see."
Davenport marveled at the success of the Williams sisters.
"The most amazing thing in sports, almost," Davenport said. "Could you imagine Tiger Woods challenging a sibling to go head-to-head for all the majors? And in an individual sport, no less. They don't have teammates to help them along."
"It's definitely very remarkable," Serena said. "It's a feat that's never happened before. Growing up, I figured, `Hey, I want to be No. 1. I want to win Grand Slams.'
"Venus obviously had the same goals. When you're young, you don't really think about it on the scale that it's on because it's improbable, really, to think of it that way."
Appearing extremely motivated to reclaim family bragging rights, Venus rolled through the first set against Mauresmo in 34 minutes. But with a blister opening on her right hand, she dropped the second set.
"Once I was able to get it wrapped, it was a lot better," Venus said. "After a while, I started realizing that it was holding me back. I've never had my hand wrapped or a blister on my hand before."
The two-time defending champion broke her French opponent in the fifth game of the decisive set for a 3-2 lead.
But Venus got into trouble when serving for the match, giving Mauresmo triple break point. The 22-year-old American answered with three service bombs clocked around 115 miles per hour to set up match point. Mauresmo hit a forehand wide, sending Williams into her eighth straight final.
"I just didn't want to let the game go," Williams said. "Things hadn't gone as well as I thought they would go the whole match, and I surely didn't want to have to get to 5-all. So it was nice to have a good service game when I was on the brink of losing it."
"I just thought I had a pretty good chance to break her on this one," Mauresmo said after the nearly two-hour match. "I broke her a few times in the match, so I thought it was makeable. She served unbelievable at this time, and that's it."
With a WTA Tour-leading seven titles this season, Venus is seeking to become the first woman to win three straight U.S. Open titles since Chris Evert captured four in a row from 1975-78. She has won 19 straight matches since her loss to Serena at Wimbledon.
With her sister booked for the final, Serena jumped on Davenport's first service game and built a 4-1 lead. She never was threatened on her own serve and closed out the set in 26 minutes.
Although she did not lose her serve again in the first set, Davenport was held without a single winner. She began the second set on a better note and hit her first winner, an overhead that made it 30-all.
In the sixth game, Davenport -- the 1998 champion -- earned her first break point against Serena and prevailed on the 14th point when her opponent hit a backhand passing shot, giving Davenport a 4-2 lead.
After Davenport held, Serena raised her level of play, taking five straight games, including 11 points in a row at one point. She broke serve to move within 4-5 and saved three set points on her next service game, each time slamming a service winner.
"I figured, 'Well, it's now or never,'" Serena said. "I didn't want to go (to a third set). I just decided to give it my best. I always used to be known for major comebacks."
"A player that's had an incredible year, nothing seemed to bother her, especially the biggest game," Davenport said. "The closest game was at 5-4, three set points -- two really well-placed first serves and a second serve at 92 (mph) on the line or whatever it was. That's incredible playing at a tight time. She just came up with some big serves at the right time the whole match."
Serena broke at love in the 11th game and started her own service game with a service winner, her 13th ace and a forehand volley winner. After a double fault, she smacked an inside-outside forehand past Davenport for her third straight victory over her countrywoman and eighth in 10 lifetime meetings.
"I think this tournament's the first time I served well this year," Serena said. "I'm very happy with the way I served. I think I was able to mix it up well."
"Both matches, at the big moments, they stepped it up to an incredible level," Davenport said. "I mean, Venus was love-40, the game was over pretty quickly. Same with my match."