Radwanska, the No. 5 seed, defeated Azarenka 6-1, 5-7, 6-0 and will go against 20th-seeded Dominika Cibulkova in Thursday's women's singles semifinals. Cibulkova earlier Wednesday posted a 6-3, 6-0 win over 11th-seed Simona Halep.
It was the second time in less than 24 hours a defending champion fell as Stanislas Wawrinka beat three-time defending men's champion Novak Djokovic 9-7 in the fifth set. But while Radwanska's quarterfinal win went the full three sets, it was nowhere as close as Wawrinka's.
Radwanska, who opened the tournament on a five-match losing streak overall, went into Wednesday's play having lost the previous four times she reached the Australian Open quarterfinals and the last seven pairings against Azarenka. Still, she raced out to a 5-0 lead in taking the first set.
Azarenka is noted for her determination, however, fought through the second set and evened the match. But the third set was all Radwanska as she took 30 of the 44 points, including 12-of-16 when serving, and cashed in three of her six breaks of the day.
Cibulkova needed just 60 minutes to get by Halep. She took 70 percent of the points on serve and allowed Halep just one break. She won an impressive 56 percent of the points when Halep served and finished off five of her nine break opportunities.
That put her into a second Grand Slam semifinal. She dropped a straight-set decision to Dinara Safina at the semis of the 2009 French Open and hadn't advanced past the third round of a major tournament since.
Thursday will mark the third major semi for Radwanska, who was a finalist at Wimbledon in 2012 (losing to Serena Williams) and returned to the semis at Wimbledon last year. She was an Australian Open quarterfinalist in 2008 and also the last three years.
Radwanska is 5-1 all-time versus Cibulkova, with Cibulkova's only win coming in three sets in the finals at Stanford, Calif., last year.
Thursday's first semifinal sends fourth-ranked Li Na against No. 30-seeded Eugenie Bouchard. Li beat Bouchard 6-4, 6-4 in a 2012 match in Bouchard's native Montreal.
Li is looking for a third finals appearance in Melbourne in four years. She owns one Grand Slam title, winning the French Open in 2011. Bouchard had never been past the third round of a major tournament before this year.