The 28-year-old Romanian is the only player in the women's draw not to drop a set in Melbourne and never looked in danger of doing so as she thrashed Estonian 28th seed Anett Kontaveit 6-1, 6-1 in 53 minutes.
Muguruza, who like Halep has won Wimbledon and the French Open, sealed a date with Halep with a 7-5, 6-3 quarter-final win over Russia's 30th seed Anastasia Pavlyuchenkova.
Muguruza edges Halep 3-2 in their five previous meetings, but Halep said she is in the kind of sizzling form that saw her defeat Serena Williams 6-2, 6-2 in the Wimbledon final in July.
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The former world number one is also growing into the Australian Open, having said previously she was sluggish and tired at the outset.
"I feel more energy going to the semi-finals. I feel more confident, I feel my game," said Halep, who is set to rise a place to second in the world rankings next week.
There has also been a change of mindset in Halep when she approaches Grand Slams, she said.
"I just feel more confident and I feel like I'm able to do it," said the Romanian, a popular figure with her fellow players.
"It's just a feeling that you don't see this trophy as impossible anymore.
"This is what I'm feeling about the Grand Slams now."
Halep, beaten in the 2018 final in Melbourne by Caroline Wozniacki, wasted no time asserting her authority over 28th seed Kontaveit, who was contesting her first Grand Slam quarter-final.
Halep broke the 24-year-old in the third game of the first set, then again in the fifth game. Spectators at Rod Laver Arena had barely had time to settle into their seats.
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Halep sealed a one-sided first set in 29 minutes with a rocket of a forehand that the overwhelmed Estonian had no chance of retrieving.
Kontaveit had failed to win a set against Halep in two previous meetings, and this was to be no different.
Halep broke again at the start of the second set and wrapped up a dominant victory in style, sending down an ace.
Halep, who struggled with a back injury towards the end of last year, said that she spent the off-season in Dubai rather than at home this year.
"I've been there almost three weeks and worked more professional than before," she said.
"That's why I left home because I can keep focused on what I have to do every day, no days off."
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