World number 15 Cilic was playing Nadal for the first time
World number two Rafael Nadal saw his impressive run at the China Open come to an abrupt end with a crushing semi-final defeat by Croatia's Marin Cilic.
The top seed, whose season has been disrupted by tendinitis of the knees and an abdominal injury, was crushed 6-1 6-3 in one hour, 22 minutes.
Eighth seed Cilic dominated Nadal from the outset, securing two breaks of serve in each set.
He will face Novak Djokovic, who beat Robin Soderling 6-3 6-3, in the final.
The result means Djokovic will move above Britain's Andy Murray in the rankings to reclaim the world number three spot.
"It was another great win," said the second seed, who improved his record against Soderling to 4-0 and remains the top winner on the men's circuit with 62 victories in 2009.
"The result is not really a picture of the whole match. He's a big server and a big hitter and was aggressive throughout.
"I had to be very patient and take my chances when they came. I hope the title will be in my hands tomorrow."
Cilic is good, is young and has a very good serve but if you are losing 6-1 6-3 there are a lot of things you are doing wrong - mentally I probably wasn't there
The 22-year-old Serb will bid for his third title of the season against a player who he has beaten on each of their three previous meetings.
Cilic, who is vying for his fourth title of the season, sent Nadal to his heaviest defeat since he was beaten 6-0 6-1 by Mikhail Youzhny in Chennai in January 2008.
"I played good tennis today, I was hitting well, I didn't give him too much time to adjust", stated Cilic, 21.
"I've played Djokovic three times and lost three times but this time I'm playing good. I believe if I can put in a performance like I did today, I'm sure I have a shot."
Nadal had won each of his previous 14 matches in Beijing - triumphing at the 2005 China Open and clinching the Olympic gold medal at the 2008 Games.
But Cilic, facing the Spaniard for the first time, ripped through the opening set with six aces and set up match points on two separate occasions in game eight of the second with unreturnable serves.
Nadal saved them both and broke to stay in the hunt at 3-5 but world number 15 Cilic broke back to seal a shock victory with a rasping forehand winner on his fifth match point.
The Spaniard was competing for the first time since the US Open after suffering an abdominal injury and goes into next week's Shanghai Masters as top seed.
"Cilic is good, is young and has a very good serve but if you are losing 6-1 6-3 there are a lot of things you are doing wrong. Mentally I probably wasn't there," conceded Nadal.
"He played very fast at the beginning, played very well. It was very difficult for me, he was serving unbelievable, returning very fast and playing winners almost all the time.
"The worst thing for me is when I had a little bit of a chance to come back into the match in the second set I didn't play well."
In the women's draw, French Open champion Svetlana Kuznetsova beat fellow Russian Nadia Petrova 6-1 6-3 in just over an hour to ease into her fourth China Open final.
The sixth seed will play Poland's Agnieszka Radwanska after she beat Marion Bartoli of France 6-4 6-3.
At the Japan Open, Jo-Wilfried Tsonga reached the final with a 6-3 6-3 victory over fellow Frenchman Gael Monfils.
Standing between the world number seven and a third title of the year is Mikhail Youzhny after the Russian beat Australian Lleyton Hewitt 6-2 5-7 7-5.
"I played unbelievable. It was amazing," said second seed Tsonga. "I was able to do anything I wanted. It was great."
Youzhny, into his second ATP Tour final of the year, added: "It's the best tennis I've played for a long time.
"I've played some good matches here and there but not consistently. I've won four matches here and played at a high level. I hope it continues."
Britain's Ross Hutchins teamed up with Australia Jordan Kerr to reach the final of the men's doubles with a gruelling three-set victory against Germany's Christopher Kas and Czech Jaroslav Levinsky.