The world No. 2 was a set and a break up before the roof was closed on Arthur Ashe Stadium due to rain. He went on to be beaten 1-6, 6-4, 4-6, 6-1, 7-5 in 3 hours, 58 minutes by an inspired Nishikori.
"I had many up and downs, in the beginning I didn't start well," the Japanese world No. 7 told ESPN analyst Brad Gilbert in an on-court interview. "It was tough but in the end it was great tennis, so very happy.
"The rain delay helped me a lot, to regroup the tactics. I had to change something to win the match. It definitely helped for my game today."
"I definitely have great memories here," he added. "Two years ago, I made the final for the first time in the Grand Slams. This is a great opportunity for me, to come in the semifinal here again. This is one of my favourite Grand Slams.
"I'm gonna watch a little bit [of Wawrinka vs. Del Potro]. I will try to recover well. I have a busy day tomorrow, so let's focus on the next one."
Murray, who claimed his third major title at Wimbledon and won a second-straight Olympic gold medal in Rio, had looked on course to blow Nishikori away after taking the first set in just 35 minutes.
It is the first time in his last eight events that the Briton has failed to make the final.
He had appeared to be in control of the match after winning the third set but became agitated after chair umpire Maria Cicak halted play mid-point at 1-1, 30-40 in the fourth set, after a loud noise went off inside the stadium.
"That's not fair," Murray said to Cicak. "On set point in the first set, there was a noise, and you said we keep playing when that happens."
Nishikori won the replayed point and held serve, with Murray continuing to complain in his chair to the referee at the change of ends before going on to lose the set.
The USTA released a statement after the match saying the noise happened because "one of the three digital audio sound processors in Arthur Ashe Stadium malfunctioned."
With the incident still appearing to bother him, Murray dropped serve at the start of the fifth set -- it was the seventh game out of eight that Nishikori had won.
The Scot looked to have regained control after breaking back and levelling at 2-2 in the fifth set but he was then broken for the eighth occasion in the match, this time from 40-15. But Nishikori got tight as he served for a 5-3 lead, with Murray managing to break from 40-0 down.
With the match seemingly headed for a fifth-set tiebreaker, Murray's serve deserted him and he committed just his third double fault. Nishikori pounced to break and then served out the win on his second serve point.