Kilkenny 1-21 Waterford 0-24
Kilkenny and Waterford will meet again at Thurles next Saturday evening at 6.45pm after Walter Walsh and Conor Fogarty struck at the death to rescue the Cats, keeping the back-to-back All-Ireland champions just about on track for a three-in-a-row.
Trailing by three points approaching the 70th minute, Brian Cody's side were in real danger of slipping to just their 10th defeat under the long serving manager.
But Walsh's 69th-minute goal tied the game up and, though Pauric Mahony put Waterford ahead again with his 14th point of the afternoon, Fogarty struck what proved to be the levelling point for the Cats.
It was a thrilling semi-final encounter but will go down as a giant missed opportunity for Waterford who had inspirational performers in Mahony, Kevin Moran and Austin Gleeson, but just couldn't hold out for victory.
Waterford were five points up with 14 minutes to go but pulled players back into defence as they attempted to hold onto the lead and Kilkenny called on all of their experience to draw level.
Waterford bounced back from their 21-point Munster final defeat to Tipperary with a quarter-final win over Wexford though the suspicion was that Kilkenny were still operating at a considerably higher level.
Cody's side retained their Leinster title with wins over Dublin and Galway to qualify for a 17th All-Ireland semi-final in 18 seasons under the long-serving boss.
But they found Waterford a tough nut to crack throughout and, like the Leinster final against Galway, it was the underdogs that surprisingly led at half-time.
Waterford hit the interval with a 0-13 to 0-12 advantage though sensed that the hard work was just beginning having watched Kilkenny come strong in the second-half of their previous two games.
Still, Waterford's big guns were all firing with Mahony contributing nine of their 12 first-half points and showing all of his skills from placed balls and open play.
Moran was immense at midfield too, scoring a point and getting through a tonne of good work like the free he won for Mahony to convert Waterford's second point.
In-form Gleeson, wearing number six but starting in the half-forwards, scored two great first-half points also, one after a fine catch catch from a puck out.
Richie Hogan was sharpest for Kilkenny and he hit four fine points, three of those from out on the left wing in the opening half and the other a clever effort under pressure from closer in.
It was all the Cats could do to keep in touch with Waterford though and they were mightily relieved to go just a point down having twice trailed by three during the half.
Waterford made sure Kilkenny didn't dominate the third quarter of the game and actually moved four clear themselves with points from Gleeson, Mahony and sub Maurice Shanahan.
Derek McGrath's side were 0-22 to 0-17 ahead with 56 minutes on the clock but they simply couldn't hold out from there and will rue their decision to drop back and attempt to hold onto what they had, scoring just two more points as Kilkenny stole the replay.
KILKENNY: E Murphy; P Murphy, J Holden, S Prendergast; P Walsh, K Joyce, C Buckley; C Fogarty (0-02), M Fennelly (0-01); W Walsh (1-01), R Hogan (0-04), TJ Reid (0-11, 0-11f); J Farrell, J Power, C Fennelly (0-01).
Subs used: E Larkin (0-01) for Farrell, L Ryan for Joyce.
WATERFORD: S O'Keeffe; S Fives, B Coughlan, N Connors; Philip Mahony, T de Burca, C Gleeson; K Moran (0-01), J Barron; M Walsh, A Gleeson (0-05), Pauric Mahony (0-14, 0-09f, 0-01 65); S Bennett, J Dillon (0-02), C Dunford.
Subs used: M Shanahan (0-01) for Dunford, P Curran (0-01) for Bennett, B O'Halloran for Dillon.
REFEREE: J Owens (Wexford).