Williams will play Belarus' world number two Azarenka after she beat Austria's Paszek 6-3 7-6 in the late match on Centre Court.
Maria Sharapova's conqueror Sabine Lisicki also went out to fellow German Angelique Kerber, while Agnieszka Radwansa's match with Maria Kirilenko was surprisingly completed on Centre Court, with third seed Radwanska going through 7-5 4-6 7-5.
Kerber faces Radwanska in the second semi-final.
The quality of tennis on show in the first quarter could have graced the final as both Williams and Kvitova tore into each other with rasping serves and ferocious groundstrokes, but it was the greater power and fight of the four-times winner that won out.
"I had to step it up today because I was playing the defending champion," Williams said in a courtside interview.
"It was tough. But I had absolutely nothing to lose. It was really fun. I'm having the time of my life out here, and I'm enjoying every moment.
"It's exciting. Everyone thinks about lifting the trophy. It's something I've thought about, but my main goal is to keep progressing. If I want to win the title, I have to step it up. There are a lot of people vying for it. I'm happy just to be in the tournament."
Both players came on court with a look of cold-steel concentration etched into their faces and the tennis on show in the opening set was arguably the highest quality witnessed in the women's competition this year.
It had looked very even in the early games before Williams turned up the heat with a vicious display of power hitting that left Kvitova stammering for a response.
Any return that dropped midcourt was sent crashing past the Czech with fearsome regularity.
Williams broke in the sixth game of the first set when Kvitova sent a crosscourt forehand wide and then closed it out when the Czech sent a backhand return long.
The second set was more nip and tuck, with Kvitova hanging tough and even creating a set point in the 10th game.
After saving that, Williams showcased her fighter qualities, firing a vicious put-away straight at her opponent when she had the whole court to aim at.
She broke the very next game before serving her 13th ace to bring up match point and closed out with a service winner to set up a semi-final against Azarenka, who will become world number one if she wins the title.
The second-seeded Belarusian eased through the first set in 46 minutes but Paszek, who beat former world number one Caroline Wozniacki in the first round, hung in tenaciously to force a tie-break in the second.
Azarenka moved 6-3 ahead under the Centre Court roof and she clinched victory on her second match point after one hour 49 minutes when Paszek sent a backhand long.
In the second quarter-final, Kerber converted her fifth match point to beat fellow German Lisicki 6-3 6-7 7-5 after a fluctuating quarter-final clash.
The eighth seed looked on course for the last four after earning two match points in the second-set tie-break but the erratic Lisicki saved them both and nipped in to take it 9-7.
Fifteenth-seeded Lisicki, a semi-finalist here last year who beat top seed Sharapova in the fourth round, found her range in the third set and served for the match at 5-3 but Kerber won four games in a row to clinch victory in two and a half hours.
"We have so many good players right now in Germany, that's really good. One of us is still in the tournament. It's good for Germany."
Kerber, U.S. Open semi-finalist in 2011, will play third seed Radwanska after her late win over Russia's Kirilenko.
Radwanska held her nerve during three rain breaks and a mid-match court switch to outlast her former doubles partner 7-5 4-6 7-5, reaching her first Wimbledon semi-final.
The third seed had been the only top-10 woman not to reach the last four of a Slam but she corrected that anomaly by resisting a determined second-set fightback from Kirilenko in a stop-start match in which fortunes wildly fluctuated.
The players appeared to be done for the day at 4-4 in the third set when the heavens opened again over Court One, with the umpire announcing: "Play is suspended for the evening and will resume tomorrow".
However, just under two hours later the duo took everyone by surprise when they re-emerged under Centre Court's covered roof.
The 23-year-old Radwanska needed just 15 minutes under floodlights to finish off Kirilenko and become the first Pole to reach a Grand Slam semi-final since tennis turned professional in 1968.
"Today for me was like 40 hours," said Radwanska, who will face eighth seed Angelique Kerber in Thursday's semi-finals.
Radwanska, who has a chance to become world number one if she reaches the final here, had missed opportunities to wrap up the match in two sets.
She twice went a break up in the second set but both times let 17th seed Kirilenko break straight back and the Russian took the set with another break before rain interrupted play for some 35 minutes.
When the pair returned, Radwanska again went a break up, then surrendered her next serve. Her inconsistency gave Kirilenko confidence and the Russian began hitting aces at will, winning the seventh game to love before play was halted early in the ninth because of rain and deteriorating light on Court One.
Radwanska was pleased that the last few games could be squeezed into the Centre Court schedule after Victoria Azarenka needed only two sets to beat Tamira Paszek in their quarter-final.
"It is always a bit difficult when you switch court," the Pole said in a courtside interview. "I am just very happy; it is better to finish on one day than wait for another day."