It was a rollercoaster battle full of twists and turns, and Kerber looked like she had blown her chance when she missed three match points in the second set and then trailed 5-3 in the decider.
But Lisicki faltered when serving for the match and eighth seed Kerber reeled off four games in a row to triumph 6-3 6-7 (9/7) 7-5 after two and a half hours under the Centre Court roof.
Kerber said: “It’s unbelievable, the match was so tough.
“Suddenly she played unbelievable tennis. I’m very happy to be in the semis here for the first time.
“We have known each other from a young age and it was mentally not easy, but it doesn’t matter who you play, you have to play your best and I stuck to my plan and played a very good match I think.”
The 24-year-old has had a phenomenal 12 months since losing to Britain’s Laura Robson in the first round here last year and then dropping out of the top 100.
She had a surprise run to the semi-finals of the US Open and has kicked on from there, winning two WTA Tour titles this season and establishing herself in the top 10.
Kerber made a brilliant start, opening up a 4-1 lead and then clinching the first set as Lisicki struggled to find the form that had seen her overpower Sharapova in the fourth round, where she gained revenge against the Russian for defeat in last year’s semi-final.
At 3-0 in the second set, the match looked over, but Lisicki began to cut down on the unforced errors and maintain her winner count to pull back level.
Kerber kept her nose just in front and had two match points with Lisicki serving at 5-4 behind, but the 22-year-old showed impressive defiance to save them.
She then saved a third match point in the tie-break with another sweet backhand, before levelling the match when Kerber left a forehand that landed on the baseline.
Lisicki looked the more confident player in the decider and she earned the chance to serve out for victory.
Yet Kerber turned the tussle around again before taking her fifth match point when her opponent blazed a backhand wide.
Kerber will play third seed Agnieszka Radwanska who beat 17th seed Maria Kirilenko 7-5 4-6 7-5.
Second seed Victoria Azarenka set up a mouthwatering semi-final with Serena Williams as she dispatched Austrian Tamira Paszek in straight sets.
Azarenka came through thanks to a second set tie-break after the Austrian fired long on match point.
Azarenka, who won 6-3 7-6 (7/4), said: “The games were really close. At the beginning of the second set we were really holding our serves well.
“It was a close match and there were a lot of long rallies but I’m glad I could manage to win.
“It’s a great feeling to be in the semi-final of a grand slam.”