Azarenka dropped just one game to the American teenager in the first set, before struggling through some shaky moments in the second.
But, the classy World No.1 recovered to take the match 6-1 6-4 and advance to her second consecutive Australian Open final.
Azarenka will face Chinese star Li Na in Saturday night's final, after Li stunned Russian shrieker Maria Sharapova in straight sets, 6-2 6-2.
Azarenka took two medical time-outs leading 5-4 in the second set, with what seemed to be a back problem, as temperatures sweltered to 35C on centre court.
Stephens crashed back to earth after her elation at beating her idol Serena Williams in their quarter final on Wednesday.
The 19-year-old showed poise beyond her years saving five match points as her much more experienced opponent flagged in the second set, but in the end the youngster could not match it with the number one seed.
The Belarussian is now on course to defend her Australian Open title.
There could be slight doubt over her fitness, however, after her lengthy break in the second set for medical treatment.