The Croatian defeated the No. 24 seed 6-7 (6), 6-4, 7-6 (3), 7-5 in two hours, 56 minutes on Centre Court at the All England Club in London.
"It's absolutely unbelievable," Cilic, who improved to 5-0 lifetime against Querrey, said afterward. "Today was a really hard-fought battle. Sam played high-level tennis. After the first set I felt I was just a little bit better on the return games and overall I felt the level was really, really high.
"I felt Sam was not tight at all and that pushed me to play big tennis toward the end of the match. I was lucky a little bit to get that break back in the fourth."
The two 6-foot-6 players played at the 2012 Wimbledon in a match that Cilic won 17-15 in the fifth set.
Cilic will be seeking his second Grand Slam trophy, winning his only major title three years ago in New York at the U.S. Open when he beat Federer in the semifinals and Kei Nishikori in the final. Cilic lost in the Wimbledon quarterfinals the past three years.
Querrey, 29, was bidding to become the first American to reach the men's singles final at Wimbledon since Andy Roddick, who lost a five-set match to Federer in 2009. There has not been an American man in a singles final in 42 of the past 43 Grand Slam events.
Cilic finished with 25 aces and won 88 percent of the points on his first serve, and produced 70 winners against only 21 unforced errors. Querrey had 13 aces with 46 winners and 26 unforced errors.