The world number two turns 25 on Friday and the Belarusian celebrated in style by breezing past Greek world number nine Maria Sakkari, 6-4, 6-1.
Sabalenka, the 2021 champion in Madrid, will face either world number one Iga Swiatek or 13th-ranked Veronika Kudermetova in Saturday's championship match.
Reigning Australian Open champion Sabalenka will be chasing a fifth WTA 1000 title, a 13th career title overall and third in 2023.
On Thursday, she took her head-to-head record over Sakkari to 6-3.
From 3-3 in the opening set, Sabalenka won nine of the last 11 games including the last five.
Aslan Karatsev won the battle of the underdogs when he edged Zhang Zhizhen 7-6 (7/3), 6-4 to make the last four of the men's event.
Karatsev, the Russian ranked 121 in the world, had to come through qualifying in the Spanish capital.
Zhang, ranked 99, was the first Chinese player to make an ATP 1000 event last eight.
"I am happy with my condition. Back to the top level," Karatsev said. "Playing well and feeling well."
Between them the two men had knocked out six seeds to reach the quarter-finals with Karatsev dropping only one set in seven matches, as he eliminated second seed and compatriot Daniil Medvedev in the round of 16.
On Thursday, Karatsev kept his nerve better at key moments and saved all three break points he faced in the first set before winning the tie-break.
He immediately broke in the opening game of the second set before going on to win in one hour and 40 minutes.
Karatsev, 29, reached the Australian Open semi-finals in 2021 but had never previously made the last four in a Masters 1000 event.
He climbed to 14th in the rankings in early 2022 before sliding.
"I started the year inside the top 100, then I dropped and lost some matches. You have to keep going and believe," Karatsev said.
"From the qualifying, match by match, it has got harder, so mentally you have to be there more. Because your opponent doesn't give you any free points so you have to be there yourself. The important thing is now to recover well."
In the semi-finals, Karastev will face either world number five Stefanos Tsitsipas or 65th-ranked German Jan-Lennard Struff.
The other semi-final takes place on Friday when defending champion Carlos Alcaraz, who will celebrate his 20th birthday, faces Borna Coric of Croatia.
