Stephens, who missed 11 months with a left foot injury before returning in July, outlasted seven-time Slam champion Venus Williams 6-1, 0-6, 7-5.
"I'm super happy to be in a Grand Slam final," Stephens said. "To do it here, my home slam, is obviously more special. I think this is what every player dreams about."
US 15th seed Keys, who had left wrist surgery for the second time in 10 months after a first-round French Open exit, routed US 20th seed CoCo Vandeweghe 6-1, 6-2 in 66 minutes to complete the first all-American US Open final since Serena Williams beat sister Venus in 2002.
"I knew I had to rise to the occasion. I'm just happy to be in the final."
The friends and Fed Cup teammates will meet Saturday at Arthur Ashe Stadium in the biggest match of either's career for a top prize of $3.7 million (3.07 million euros).
"I've known her for a long time. She's one of my closest friends on tour," Stephens said. "I love her to death. And it's not easy playing a friend."
"I have no words to describe what I'm feeling, what it took to get here, the journey I've been on," Stephens said.
"It's incredible. I don't know how I got here. Your guess is as good as mine. Just hard work. That's it."
Stephens beat Keys in the second round at Miami in 2015 in their only career meeting.
"Sloane is a new person right now," Keys said. "She's so excited to be out on the court again. I'm excited we get to play each other in the US Open final."
"I just worked my tail off and tried to run every ball down and here we are," Stephens said. "It required a lot of fight and a lot of grit."
Now 83rd, Stephens is the lowest-ranked Slam finalist since unranked Justine Henin at the 2010 Australian Open and the lowest at the US Open since unranked Kim Clijsters won the 2009 title.
Stephens, who beat Williams in the first round of the 2015 French Open in their only prior meeting, will jump into the world top 25 next week with the victory.
"It was definitely well competed," Williams said. "In the end she won more points than I did and that's what it added up to.
"Just made so many errors at the end there... I wasn't playing well. Just wasn't playing well."
Williams will return to the top five in Monday's world rankings for the first time since 2011, the year she was diagnosed with strength-sapping Sjogren's Syndrome.
- Stephens 4-0 in WTA finals -
Stephens, 24, is 4-0 in WTA finals, having won titles in 2015 at Washington and last year in Auckland, Acapulco and Charleston.
The only cautionary note for Keys, 22, was a medical timeout to have her right leg taped three games from the end.
"I definitely started to feel it," she said. "I felt if I went too far it might be something more."
It was the first all-American US Open women's semi-finals since 1981 and the first at any Slam since Wimbledon in 1985.
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