Djokovic, 32, held off No. 23 seed Bautista Agut to reach the final round for the second straight year. Djokovic beat Kevin Anderson last summer for his fourth career Wimbledon championship.
"He played really well," Djokovic said. "The first few games of the third set [of] the match could have gone a different way, but I am glad it went my way."
Sunday's final round is Djokovic's 25th Grand Slam final. He beat Nadal in January's Australian Open for his other major win this year.
The Centre Court crowd openly rooted for the Spanish underdog to pull off the upset. A frustrated Djokovic taunted fans by putting his finger to his ear during the third set.
Djokovic celebrated his victory with an emphatic fist pump. His 64 four-set Grand Slam wins are the most in Open Era (since 1968) tennis history.
Djokovic also won Wimbledon in 2011, 2014 and 2015. He was the runner-up to Andy Murray in 2013.