Murray dominated on his serve - and pressured Nadal’s - throughout the first set, also using his drop shot to good effect.
But fifth-seeded Nadal broke Murray at the start of the second set to regain momentum and beat Murray for the third time in a semifinal here.
The Spaniard found his serving range in the decider, twice holding to love and eventually clinching victory on his fifth match point.
Nadal won the last of his eight straight titles in 2012 and lost the final to Novak Djokovic the following year.
He faces No. 8 Jo-Wilfried Tsonga or No. 13 Gael Monfils in the final.