Liverpool earned a 5-3 aggregate victory over Arsenal after two late goals gave them a 4-2 win in a dramatic all-English clash at Anfield while Chelsea beat Turkish champions Fenerbahce 2-0 at home to overturn a 2-1 first-leg deficit.
It will be the third Champions League semi-final meeting between the two sides in the last four seasons, with 2005 winners Liverpool winning both previous encounters.
Second half substitute Ryan Babel swung the tie Liverpool's way when he won an 85th-minute penalty converted by captain Steven Gerrard and the Dutchman sealed the win in injury time after Arsenal looked to have done enough to go through.
Abou Diaby fired Arsenal into a 13th minute lead with an angled shot but a Sami Hyypia header and a superb Fernando Torres goal turned the match in Liverpool's favour.
The visitors once again silenced the raucous home crowd when Emmanuel Adebayor rounded off a brilliant solo run by Theo Walcott to make it 2-2 but Liverpool responded immediately as Babel burst into the box and was fouled by Kolo Toure.
Gerrard drilled in the spot-kick and Babel sent the Anfield faithful into raptures with a cool finish in injury time after racing clear of Cesc Fabregas.
Chelsea maintained their own challenge in Europe's premier club competition after goals from Michael Ballack and Frank Lampard handed them the win over battling Fenerbahce.
Lampard delivered a perfect cross for Ballack to head home in the fourth minute and completed Chelsea's passage with a late tap-in after Michael Essien muscled his way past two defenders.
On Wednesday, English champions Manchester United defend their 2-0 first-leg lead over Roma at Old Trafford while 2006 winners Barcelona are at home to Schalke after last week's 1-0 win over the German side in Gelsenkirchen.