Brimming with confidence in a season which has seen him go from No. 22 in the rankings in May to No. 1 when they are released on Monday, and in which he also added the U.S. Open to his Grand Slam haul, Djokovic created pressure throughout.
The Swiss converted the first of two break points when Nishikori sent a seemingly straightforward forehand wide and Federer served out the set in style, with some stunning play at the net bringing the crowd to their feet.
It was the 4th successive win for Djokovic over Federer, and the Serb will play against Russia's Karen Khachanov.
The 22-year-old Khachanov needed one hour and 37 minutes on Sunday evening to defeat Djokovic for the first time, preventing the Serbian from equalling the record Spaniard Rafael Nadal set - 33 Masters titles.
Saturday's other semi-final will feature Austrian sixth seed Dominic Thiem against unseeded Russian Karen Khachanov who knocked out fourth seeded Alexander Zverev. He deserves it. He's a young player... up-and-coming. "I couldn't be happier to finish the season like this".
"I'm very, very happy and proud about it".
"I was never going to win the match, so it was just I told him to calm down a little bit".
Djokovic, victor of the Wimbledon and US Open championships this year, will now face Roger Federer or Kei Nishikori for a place in Sunday's final. Federer will need to win this time if he is to keep alive his albeit slim chance of regaining the year-end No1, and with it his 100th title.
Novak Djokovic celebrates after winning his semi final match against Switzerland's Roger Federer.
"The second thing is after some tough loses against top guys like Rafa in NY, I think they push me to the limit and even to work more harder".
Cilic and Thiem sealed the last two spots for the season-ending ATP Finals in London, starting on November 11. I want to talk about how well he (Khachanov) played all week. But already established player, top player.
Thiem, age 25, has recorded 50+ match wins for the second time in his career: 53-17, courtesy of three titles in Buenos Aires, Lyon, and St Petersburg.