Set 214 to win, Australia were struggling at 59-3 with Wahab Riaz (2-54) in the middle of a ferocious spell of short, fast bowling which seemed to have the hosts rattled.
But an 89-run partnership between Watson and Steve Smith (65) steadied the ship, although things could have been very different had Watson not been dropped on four by Rahat Ali at fine-leg off Riaz.
Smith fell in the 27th over with Australia needing a further 66 runs to win but a 29-ball 44 from Glenn Maxwell helped Australia over the line with 16.1 overs to spare.
Josh Hazlewood (4-35) had earlier claimed four wickets as Australia skittled Pakistan out for just 213 at the Adelaide Oval.
Pakistan ??? who won the toss and chose to bat ??? lost both openers by the sixth over as Sarfraz Ahmed (10) fell to a smart catch at first slip by Watson off Mitchell Starc and Ahmed Shehzad edged Hazlewood to second slip for five.
Misbah had a lucky escape off the second ball he faced when a Hazlewood delivery brushed his pad and clipped the leg stump, only for the bail to stay in its groove.
The Pakistan skipper, so often their batting saviour in the tournament with four half-centuries in six matches, took advantage of his good fortune to add 73 for the third wicket with Haris Sohail ??? who top-scored with 41.
Misbah pulled Maxwell over mid-wicket for two sixes but, having made 34, fell to a catch in the deep by Aaron Finch while attempting a similar shot, while Haris’ disciplined innings ended when Mitchell Johnson forced an edge to wicketkeeper Brad Haddin on the drive outside off-stump.
Umar Akmal (20) fell into the same trap set as Misbah as he pulled a short ball from Maxwell straight to Finch on the mid-wicket fence, reducing Pakistan to 124-5 in the 30th over.
That brought Shahid Afridi to the crease for what would prove to be his final ODI innings and he began brightly with two boundaries off Maxwell before cutting Johnson over point for six, but his entertaining 23 off 15 balls ended when he pulled Hazlewood high to Finch again at mid-wicket.
Sohaib Maqsood (29) added a further 30 runs with Wahab (16) but both departed within five balls of each other and with the score on 188, before Hazlewood picked up his fourth and Australia’s ninth wicket as Sohail Khan top-edged one high to Haddin for four.
That left Pakistan with six overs still to bat and the score at 195 but the last-wicket pair took them past 200 before the final wicket fell with one ball remaining.
In reply, Sohail took the early wicket of Finch, lbw for two, but it was not until Wahab came on for his first over with eight gone, that Pakistan really gained the upper hand.
David Warner (24) fell to his fourth ball, sending a short one down to Rahat at third man who gave no sign of his later butterfingers with a comfortable, clean catch.
And Wahab got the Australia captain for eight in his next over, with Michael Clarke fending off a well-directed short ball to Maqsood at short leg.
It was in his fifth over of a pulsating six-over spell that he should have added Watson to the wicket column only for Rahat to drop the catch.
With Wahab removed from the attack for a rest, Smith and Watson were not troubled by the short-pitched bowling served up by Sohail or the spin from Afridi, in the same way, as they eased towards victory.
Smith???s wicket, lbw to Ehsan Adil, suggested there could still be some late drama but Wahab struggled for the same aggression when brought back for his second spell ??? although he was unfortunate to see another drop go down, this time off Maxwell when on five.
Maxwell made the most of the reprieve, playing some outrageously unconventional shots in his trademark style and smashing a couple of sixes as Australia won to book their semi-final spot against India in Sydney on Thursday.