Two-time champion Serena saved a match point and overcame Elena Dementieva 6-7 (4), 7-5, 8-6 in 2 hours, 49 minutes -- the longest women's semifinal at Wimbledon in at least 40 years. Five-time winner Venus, meanwhile, needed only 51 minutes to demolish Dinara Safina 6-1, 6-0 and reach her eighth Wimbledon final.
"Oh, my God, this is my eighth final, and it's a dream come to true to be here again and have the opportunity to hold the plate up," Venus said.
The sisters -- with 17 Grand Slam titles between them -- will face each other Saturday in a Fourth of July final.
"A fourth final -- it's so exciting. It was so hard before my match to watch all that drama," Venus said, referring to Serena's semifinal. "It was so difficult. But the hardest part is next to come, to play Serena Williams."
One Williams or the other has won seven of the past nine championships at the All England Club. Serena beat Venus in the 2002 and '03 finals, and Venus came out on top against her younger sister last year.
"All I know is a Williams is going to win," said the sisters' father, Richard.
Venus is bidding to become the first woman since Steffi Graf in 1991-93 to win Wimbledon three years in a row.
There have been seven previous all-Williams championship matches at majors, with Serena holding a 5-2 lead. Overall, the sisters are 10-10.
"The more we play, the better it gets," Serena said. "When we play our match on Saturday, you know, it's for everything. This is what we dreamed of when we were growing up in Compton 20-something years ago. This is what we worked for, and this is what we want. Like I wanted her to win today and she wanted me to win today. It's all come down to this."
Venus said she was rooting for Serena to win Thursday but will now do all she can to stop her sister and win her eighth major title.
"I'm happy for her to be in the final, but I have to face her and defeat her," Venus said. "I don't necessarily want her to lose, but for sure I want me to win. I don't want to see myself disappointed. I need to get my titles, too. I'm still the big sister, but I'm still going to play great tennis."
The difference in the two semifinals couldn't have been more striking.
The Serena-Dementieva match was the longest women's Wimbledon semifinal by time since 1969; records are incomplete before then. Venus' win was the most one-sided women's semifinal since Billie Jean King beat Rosie Casals by the same score in 1969. The last time a semifinal ended 6-0, 6-0 was in 1925.
After Serena's tense, drama-filled escape against Dementieva, Venus barely broke a sweat against Safina. The Russian is ranked and seeded No. 1 despite never having won a Grand Slam tournament. Safina won only 20 points and was completely outclassed by the third-seeded Venus, who has been playing some of her best grass-court tennis at this tournament.
"She's just too good on grass," Safina said. "It's not my favorite surface, and it's her favorite surface. I think she gave me a pretty good lesson today."
One remarkable statistic summed it up: Venus was credited with just one unforced error in the match. She had 16 winners, while Safina had 16 unforced errors and six winners.
"I don't know if there's such a thing as perfect for an athlete, but I felt happy with it," Venus said. "And I felt like my performance has been building each round better and better. ... I think the score just showed my level of play. I was just dictating on every point."
Serena, meanwhile, was pushed to the limit by the fourth-seeded Dementieva but raised her game when needed.
"It's definitely one of my more dramatic victories, for sure," Serena said.
Dementieva, who has never won a Grand Slam title, played one of the best matches of her career and nearly eliminated a player who has won 10 majors.
After Dementieva sailed a backhand wide to end the match, Serena threw her head back, pumped her arms and hopped up and down.
"Elena played so well, and we gave the crowd a wonderful match," Serena said. "It was really, really tough."
In the 10th game of the final set, Serena faced match point on her serve with Dementieva ahead 5-4. Serena chose to attack, coming forward and hitting a backhand volley that skipped off the net cord and into the open court for a winner.
"I thought ace," Serena said. "It's my serve, if I can just stay calm. I was just trying to think positive."
Dementieva said: "The only regret I have, maybe I should take a little bit more risk on match point, should go down the line."
It was Serena's eighth straight win in a Grand Slam semifinal going back to the 2003 French Open. She is 14-2 overall in Grand Slam semifinals.
It was almost too much to handle for father Richard, who watched with other family members and friends in the guest box.
"Serena nearly gave me a heart attack," he said. "Venus played as if she had someplace to go and she was in a major league hurry to get a great dinner."
Serena served 20 aces -- the most for a woman at Wimbledon since 2000 -- and had 45 winners and 28 unforced errors. Dementieva produced 27 winners, 26 errors and eight double-faults.
"That was the best match we ever played against each other," Dementieva said. "It was a real fight from the beginning until the end. I feel like I finally played some good tennis here. It was not easy to fight against her. She's a great champion. She was serving very well today. I wasn't sure if it's Serena or Andy Roddick on the other side."
The men's semifinals are Friday, with two-time finalist Roddick playing Andy Murray and five-time champion Roger Federer facing Germany's Tommy Haas. Federer is closing in on a record 15th Grand Slam championship, while Murray is seeking to become the first British men's winner in 73 years.