Muguruza fell to a 6-4, 6-4 defeat as Kasatkina reached her second semifinal in as many weeks.
The world No 26 Kasatkina, who has yet to drop a set in Sydney, fired four aces and won 77% of her first-serve points against Muguruza to seal the victory.
The victory was also Kasatkina’s first over a top five player since defeating Caroline Wozniacki in the fourth round of Roland Garros 2018.
“At the beginning, I was maybe a bit overexcited, I wanted to do too much, but at the end, I was able to control myself and took few good decisions and was happy with the result,” Kasatkina told reporters.
“I think it’s also very good preparation before a Grand Slam because anyway it feels different to play on the big courts against a big player.”
World No 4 Krejcikova claimed a 6-0, 6-2 victory over France’s Garcia and set up a semifinal with Anett Kontaveit, who advanced when her Tunisian opponent Ons Jabeur withdrew with a lower back injury after losing the first set 6-4.
After blanking her opponent in the opening set, Krejcikova went ahead 2-0 in the next set and staved off a comeback attempt by Garcia to close out the match in 68 minutes.
Spain’s Paula Badosa survived a mid-match wobble to beat Olympic champion Belinda Bencic 7-6(6), 3-6, 6-3 and will face Kasatkina for a spot in the final.
In the ATP 250 event at the same venue, former world No 1 Andy Murray moved into the semifinals when his opponent David Goffin retired injured after losing the first set 6-2.
The 34-year-old Murray, who has slipped to 135th in the world rankings after long injury lay-offs due to hip surgery, will be making his first semifinal appearance since winning in Antwerp in 2019.
“It’s obviously been a while for me. I do feel like I was getting — well, I have been getting closer in the last few months and my results would suggest that,” Murray told reporters.
“Good to get there this early in the season. Yeah, hopefully, can keep building from here and have a strong year.”
Up next for Murray is American Reilly Opelka, who overcame compatriot Brandon Nakashima 7-6(4), 6-2.
Also advancing to the next round was top-seeded Russian Aslan Karatsev, who beat Lorenzo Sonego 6-2, 3-6, 6-2.
Karatsev will next face British third seed Dan Evans, who beat American Maxime Cressy 6-4, 7-6(5) in the evening session.