The world number one, who has won the title on each of the eight previous occasions he has reached the semi-finals in Melbourne, claimed his first straight-sets win since the first round, beating the world number 114 6-3 6-4 6-2.
It was a much-needed comfortable evening for Djokovic after the dramas of his tournament so far, including an abdominal injury suffered in a third-round five-setter against Taylor Fritz and a nail-biting victory over Alexander Zverev in the quarter-finals.
He admitted that left him feeling emotionally drained and this was not entirely straightforward, with Karatsev clawing his way back from 1-5 to 4-5 in the second set and forcing Djokovic to save two break points.
The roar let out by the top seed when he clinched the game showed what a big moment it was, and he ended with a run of four games in a row.
Djokovic, who will play in a 28th slam final against either Daniil Medvedev or Rafael Nadal's conqueror Stefanos Tsitsipas on Sunday, said: "This is the best I've felt in the entire tournament.
"(I) felt great, I could swing through the ball, no pain. Best match so far. It came at the right time and I'm thrilled to feel this way.
"I have two days now. I'll definitely train one of the next two days. Recovery is priority right now. I'm feeling the ball well, I had enough match play, so right now it's just gathering all the necessary energy for the most important match."
Karatsev's victory over Grigor Dimitrov on Tuesday made him the first man in the Open era to reach the semi-finals on his grand slam debut, and he was looking to become the first qualifier to make a final.
The 27-year-old Russian, who will rocket into the top 50 having never previously been inside the top 100, was far from overwhelmed against Djokovic but he discovered just why the Serbian is renowned as arguably the greatest defensive player the game has seen.
He began very well, showing no nerves in by far the biggest match of his career, but a loose game allowed Djokovic to break for 5-3 and that was the first set gone.
The world number one looked in complete control of the second but there were signs he was still not feeling totally confident physically as he took his foot off the pedal and back came Karatsev.
The Russian retrieved another break at the start of the third set but Djokovic forged ahead again and completed the victory after an hour and 53 minutes.