The injury-nagged 28-year-old veteran from Argentina took advantage of 27 unforced errors from the Australian Open semi-finalist to reach Sunday's final against eighth seed Marcos Baghdatis of Cyprus, the first US final for either.
"It's going to be a tough one," Nalbandian said. "He's playing good."
Baghdatis shrugged off a left ankle injury in the second set to beat Belgian Xavier Malisse 6-2, 7-6 (7/4). The 25th-ranked Cypriot seeks a fifth career ATP title, the first since this past January at Sydney.
Nalbandian, ranked 117th, has lost three of four prior matches with Baghdatis, including a 2006 Australian Open semi-final and their most recent meeting in the third round at Wimbledon in 2007.
"David is quick on his feet, likes to open the court a lot," Baghdatis said. "He likes to move you around the court."
Nalbandian was sidelined nine months after hip surgery, made a brief return early this year, then missed two more months with a sore hamstring before coming back in July to help Argentina advance to the Davis Cup semi-finals.
"My surgery was not an easy one. Not many players come back from that," said Nalbandian. "Now I'm just working hard and taking nothing for granted."
Nalbandian, seeking his 11th career title and first since 19 months ago at Sydney, missed the past six Grand Slam events, had not played an ATP event since April and had not made a semi-final since February 2009 at Buenos Aires.
"I'm feeling good," Nalbandian said. "I had too many weeks without matches."
After an exchange of breaks to open the match, Nalbandian denied Cilic on two break points to hold in the fifth game, then broke Cilic in the sixth and eighth games on netted forehands from the European to claim the first set.
Nalbandian broke Cilic with a cross-court forehand winner to seize a 2-0 lead in the second set and broke again in the final game when 13th-ranked Cilic, an Australian Open semi-finalist, netted a backhand on match point.
"I returned good. That made me play with more confidence," Nalbandian said. "I tried to pressure him and that worked."
Baghdatis, reunited last month with coach Guillaume Peyre of France because "we had unfinished business", could return to the top 20 after a rankings slide from the top 150 last year with wrist and back injuries.
Baghdatis, the 2006 Australian Open runner-up, went down in the eighth game of the second set as Malisse missed a break chance by hitting a backhand long.
"I just twisted my ankle a little bit," Baghdatis said. "I felt it a bit. Now it feels OK. But I was a bit scared. That's why I fell down. But I got it taped. I was moving around and I was fine. I hope it will feel OK tomorrow."
After the 25-year-old Cypriot went down, Malisse grabbed an ice bag from behind the seating area and brought it to his fallen rival before trainers arrived to treat him.
"If you win a match, you don't want to win it that way," Malisse said.
Baghdatis, who recovered to hold serve and went on to seize a 6-1 lead in the decisive tie-breaker, appreciated the gesture.
"That's typical sportsmanship from Xavier," Baghdatis said. "I would have done the same thing. I've done it before. But some guys don't."