Fifth seed Pegula took just an hour to complete a 6-2 6-1 win over the 19-year-old US Open champion in Cancún, Mexico.
“I managed to get my act together at the end of the year,” Pegula told reporters. “I’ve done a good job of resetting coming here.”
“I found a way to make it work,” she added. “I’m feeling confident going into the finals.”
Pegula will play either world No. 1 Aryna Sabalenka or second seed Iga Świątek in the final. That semifinal was suspended after three games on Saturday because of rain and will resume on Sunday, meaning the final has been moved to Monday.
Sabalenka or Świątek will meet a player who has yet to lose a match in Cancún, reaching the final with a 4-0 record and with three of those wins coming against higher-ranked opponents.
Her victory over Gauff was her second in three meetings against her compatriot. The 29-year-old played the testing conditions – there were rain breaks in the second set and a swirling wind throughout – better than her opponent, breaking Gauff six times and making just 11 unforced errors (Gauff totalled 25 unforced errors).
According to the WTA, Gauff would have become the first teenager since Maria Sharapova in 2004 to win the tournament. A 17-year-old Sharapova defeated Serena Williams in the final that year.
“It’s probably my biggest final ever,” Pegula said. “It’s going to give me a lot of confidence going into next year.”
Gauff and Pegula will be back in action on Sunday, competing together in the doubles for a place in the semifinals. Their round-robin match against Laura Siegemund and Vera Zvonarava was suspended on Friday with the Americans leading 6-3 1-1.