Serena Williams overcame a spirited challenge from teenager Madison Keys to become the oldest Australian Open finalist in the open era on Thursday.

Williams recovered from a break down in the opening set and saw Keys save seven match points before eventually securing a 7-6 (7/5) 6-2 win in an hour and 24 minutes on Rod Laver Arena.

The world number one will face second seed Maria Sharapova in Saturday's final after the Russian defeated compatriot Ekaterina Makarova 6-3 6-2 in straight sets.

Keys broke Williams in the opening game of the match on her way to a 3-1 lead, only for Williams to break back in the sixth game as the pair traded ferocious groundstrokes.

Williams moved 6-3 ahead in the tie-break and although Keys saved the first two set points with aces, she could do little about a service winner from Williams on the third.

Williams, who has won the title every time she has advanced beyond the quarter-finals in Melbourne, took command of the second set with two breaks of serve but Keys bravely saved seven match points on her own serve, while one forehand winner even had Williams applauding.

That meant Williams had to serve out for the match and the 18-time grand slam singles champion did so with her 13th ace of the contest.

"I'm really excited to be in the final again," said the 33-year-old Williams, who is three months older than the previous oldest finalist, 1988 runner-up Chris Evert. "I didn't come here with that expectation so it's really exciting.

"I didn't play well, I don't think, at the Hopman Cup. I was so off. I felt like I wasn't moving well. I just wasn't feeling great on the court.

"It's also been so long since I've even been in a final here (since winning her last title in 2010)."

Williams revealed she was benefiting from a new relaxed attitude after becoming caught up in winning her 18th grand slam title, matching the totals of Evert and Martina Navratilova and four behind record holder Steffi Graf.

"It started last year because I was so hyped on getting to 18 and I lost every grand slam early," she said.

"I didn't make it to any quarter-finals. Then after Wimbledon I decided to not necessarily not care, but just relax. It all kind of came back for me after that (winning the US Open) and I think it's been working."

Sharapova made it six wins out of six against 10th seed Makarova, winning in an hour and 27 minutes.

Since saving two match points in her second round match with Alexandra Panova, Sharapova has not dropped a set and has lost just 15 games as she seeks to win a sixth grand slam singles title.

The 27-year-old had to save two break points in a 10-minute opening game and promptly broke Makarova's serve to surge into a 4-1 lead.

Makarova briefly threatened a comeback when she broke back to trail 3-4, only to lose her serve again in the next game before Sharapova served out for the set after 48 minutes.

Two more breaks in the first three games of the second set gave Sharapova a commanding lead and the French Open champion was never in danger of letting it go.

"When you start off the tournament you take it a match at a time and it's been kind of a strange road to get to the final, but I am here and really, really happy," the 27-year-old said.

"Playing another Russian and someone who was not necessarily the favourite coming into the match, I knew she would come out and play really well and I think I was ready for that, stood my ground and competed well.

"I felt that I've had really good matches and a good record here in Australia, ever since the junior days and been able to carry it over as a professional. I've had many great memories on Rod Laver Arena. I've hopefully set myself up for another one."