The Spaniard, attempting to snatch back the title he won four years in a row before a shock defeat last year, treated the crowd to some dazzling play in a 6-2 6-3 7-6 victory.
Austrian Melzer, contesting his first grand slam semi-final, played brave attacking tennis and briefly rocked Nadal with an impressive late fightback.
Nadal broke the Melzer serve in the sixth game of the first set and was cruising until he dropped serve at 5-4 in the third set but steadied himself to win a tiebreak.
Robin Soderling, whose win over the Spaniard in last year's fourth round was Nadal's first Roland Garros loss, awaits in the final after his five-sets win against Tomas Berdych.
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