Nishikori, who became the first Asian man to reach a grand slam final when he finished runner-up here in 2014, broke the Scotsman in the 11th game of the fifth set with a brilliant reflex volley and served out to complete the triumph.
The upset ended a stellar run by Murray that had taken him to seven successive finals, including victories at Wimbledon, the Rio Olympics, Queen's Club and Rome.
"It was too exciting on the court, but I tried to stay calm," Nishikori said in an on-court interview. "It was really tough to stay calm. There were many ups and downs.
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"In the end it was great tennis, so very happy."
The four-hour match was a roller-coaster ride of emotions and momentum swings from the start.
Murray hit a low point in the fourth set when Nishikori was serving at 1-1.
The world number two held double break-point at 15-40 when chair umpire Mariana Alves called a let and a replay during a point Murray was controlling because of a loud, intrusive sound from the public address system.
Murray was annoyed because when he had complained of a sound disturbance earlier in the match, the umpire said in such instances the players would play on.
The distracted Briton squandered his chances and lost the game. Between the changeover Murray complained to the tournament supervisor and when play resumed he never won a game again until he was down 0-2 in the fifth.
Still, Murray was gracious in defeat.
"I'm not too disappointed. It was a good match," he told reporters. "Disappointed not to have won, but I've had a good run. I would've loved to go further but that wasn't to be today."
Murray had been masterful in the opening set, taking Nishikori's second serves early to put the Japanese sixth seed on the defensive, while benefiting from his 14 unforced errors.
Nishikori gathered himself after a light rain forced a closing of the roof at 3-3 in the second set that interrupted play for some 20 minutes and allowed him to meet with his team in the locker room.
"That helped me a lot to regroup the tactics," he said. "It definitely helped for my game today."
Nishikori traded ground strokes more patiently, taking advantage of his chances, and the two players battled fiercely with sharply angled ground strokes, drop shots and net play.
The match between two of the best returners in tennis produced a whopping 17 service breaks that kept tensions high at Arthur Ashe Stadium.
"I just didn't hold serve enough," said Murray, who was broken nine times.
Nishikori will meet either double grand slam winner Stan Wawrinka or 2009 U.S. Open champion Juan Martin del Potro in the last four at Flushing Meadows.
(Editing by Frank Pingue)
