Cheered on by fans waving Tunisian flags amid a heat wave in Berlin, Jabeur recovered from 3-1 down in the first set and dominated the second to set up a final against Belinda Bencic on Sunday.
"You have to be this good to beat Coco, you know. She's a great player," Jabeur said, adding that she had "no expectations" for her first grass tournament of the season and paying tribute to the Tunisian fans. "Everywhere I go they're always here, they're chanting all the time, it's amazing."
Jabeur will play her fourth final in a season where she has reached a career-high ranking of fourth in the world and became the first African and first Arab player to win a WTA 1000 event at last month's Madrid Open. The tournament in Berlin is her first since a surprise first-round loss at the French Open.
Next week, Jabeur is heading to Eastbourne, where she will team with Serena Williams in doubles in the American's return after a year out.
Gauff's run in Berlin was her best yet on grass, a surface on which she hadn't previously reached any quarterfinals.
Bencic is back in the Berlin final for the second straight year in her quest for a first grass-court title in seven years after a hard-fought, 6-7 (6), 6-4, 6-4 win over Maria Sakkari played over more than three hours in the heat.
Bencic had set point in the first-set tiebreaker before her Greek opponent won the next three points to take the set.
The second set and decider were also closely contested, with the second-seeded Sakkari saving four set points in the second and two match points in the third before Bencic broke through.
Sakkari is ranked sixth, 11 places above Bencic, but had never played a grass semifinal before.
The Swiss player has a chance to win the Berlin title after losing last year's final to Liudmila Samsonova. Olympic gold medalist Bencic has a 6-8 record in finals, including 1-3 on grass, with the lone title on that surface coming in Eastbourne in 2015.
Bencic leads Jabeur 2-1 in career meetings, all of them on clay. Jabeur lost the Charleston Open final to Bencic in April but won their last meeting a month later on her way to the Madrid title.