World number one Williams thrashed a rattled Li, overcoming some staunch resistance at the end, while Azarenka returned to the Flushing Meadows final with a 6-4 6-2 win over unseeded Italian Flavia Pennetta.
"Just to be able to defend a title for once would be really awesome," said French Open winner Williams, who will get her chance on Sunday after failing to go back-to-back following her 1999, 2002 and 2008 titles in New York.
Although overpowered in the opening set, Li battled valiantly in the second, saving six match points to hold serve before the top seed finally closed the deal on a seventh with an unreturned serve.
"It was a good match. It was tough at the end," Williams said. "I got a little nervous but I was able to close it out."
Former French Open champion Li, China's first semi-finalist at the US Open, admitted that she experienced a bout of nerves when she hit the Arthur Ashe Stadium court.
"I should not be, like, nervous because (it was) not (the) first time to play semis," said Li, twice an Australian Open finalist. "But when I walked to the court I was feeling the court (was) so big. I mean, even my side, it was feeling like a football court.
"In the end, finally, I can play tennis," she added with a smile.
Williams, hot off a 6-0 6-0 quarter-final win against Spain's Carla Suarez Navarro, had won 24 consecutive games before Li held serve in the second game of the second set.
"To hear constantly, 'go Serena, go Serena,' it is really a pleasure. I hear young voices and older voices and it really makes me feel so special," said Williams.
Williams and Azarenka's final will be the first back-to-back title clash at the US Open since Serena and her older sister Venus battled for the crown in 2002.
Belarusian Azarenka trails 12-3 head-to-head against Williams, but has won two of their last three matches, hardcourt finals in Doha and Cincinnati.
"When you play against Serena, you have to play your best," said Azarenka. "She makes me play my best."
Williams is bidding for a fifth US Open title and her 17th in Grand Slams.
At 31, she would become the oldest women's winner at Flushing Meadows since tennis turned professional in 1968, supplanting Australia's Margaret Court who won in 1973.