The other last-four tie an all-Canadian affair between wild card Vasek Pospisil and 11th seed Milos Raonic.
World number one and two-time reigning champion Djokovic made light work of seventh seed Richard Gasquet in the quarter-finals, sending down 11 aces and breaking the Frenchman four times en route to a 6-1 6-2 triumph in just 52 minutes.
When asked after his match about a potential semi-final clash with fourth seed Nadal, Djokovic said on www.atpworldtour.com: "For me it's very important to try to start well tomorrow [Saturday] against whoever I play.
"You know, if I'm playing as well as I did today, I think I have a chance to really win against anybody on this court."
Nadal also made smooth progress at the hardcourt tournament, sinking Australian qualifier Marinko Matosevic 6-2 6-4 in one hour 19 minutes in the day's last quarter-final.
"I think I played well," said the Spaniard, who never looked back after breaking the world number 74's serve in the third game. "I played a positive match.
"To win 6-2, 6-4 against a tough opponent, it is impossible to play bad. I am happy the way I played. To start the hardcourt season like this with semi-finals is a great start."
Surprise package Pospisil earlier became the first Canadian to reach the semi-finals of the event since 1969 when, 3-0 up in the first set against Nikolay Davydenko, the Russian retired due to illness.
And the home interest did not end there as he was swiftly joined in the last four by Raonic, who saw off Andy Murray's conqueror Ernests Gulbis 7-6 (7/3) 4-6 6-4 in their quarter-final encounter.
"It's great, what it all means, what it represents for tennis in Canada," Raonic said. "It's great what it shows to little kids - that you can succeed as a Canadian in tennis."