Eduardo Vargas' stunning strike sent Chile into their first Copa America final since 1987, after a controversial red card to Peru's Carlos Zambrano gave the tournament hosts a big advantage.
Referee Jose Argote expelled Zambrano in the first half, leaving Peru to play 70 minutes with 10 players and despite a brave performance from Ricardo Gareca's men, Chile eventually prevailed 2-1 in Santiago thanks to a brace from Vargas.
The Napoli striker opened the scoring in the 42nd minute in almost comical circumstances, with Vargas scuffing his initial shot before rolling the ball past Peru's prostrate goalkeeper Pedro Gallese.
There was nothing slapstick about Vargas' second goal, however, with the 25-year-old thumping the ball over Gallese into the top corner from outside the box in the 64th minute, putting the home side back in front soon after Gary Medel's own goal had drawn Peru level.
With reports Bolivian referee Raul Orozco was initially selected to take charge of Monday's game before being replaced due to historical animosity between Bolivia and both Peru and Chile, stand-in official Argote was always going to be in the spotlight.
And it took just three minutes for Argote to be involved in a moment of controversy, with the Venezuelan keeping his cards in his pocket after a clash between Zambrano and Arturo Vidal, with the latter particularly lucky to escape sanction after he pushed his opponent in the face.
Midway through the first half and Argote sent off Zambrano for what appeared to be an accidental high boot on Charles Aranguiz, and although Peru defended stoutly and produced a number of chances on the counter-attack, Gareca's side will feel harshly done by.
Having progressed from their first Copa America semi-final since 1999, Chile are now one game away from a maiden title at South America's continental championships.
It could have been a very different match at the Estadio Nacional had Argote chosen to send off Vidal early, with the Juventus midfielder tangling with Zambrano as the latter looked to shepherd the ball out in the fourth minute.
Just two minutes later and Zambrano received a yellow card for a foul on Alexis Sanchez, before Peru's Jefferson Farfan struck the post with a header, and in the 20th minute, Argote left an indelible mark on the match.
Zambrano cleared the ball high into the air and Aranguiz appeared to back into the central defender as he tried to block, and the Chile midfielder made the most of contact as his opponents studs struck his back.
Gareca withdrew Christian Cueva for centre-back Christian Ramos as Peru sat back, with Luis Advincula pulling off an incredible block to deny Vargas just after the half-hour mark.
Paolo Guerrero was doing well as the lone man up front for Peru and almost teed up Farfan seven minutes before the break, and soon after Vargas broke the deadlock, tapping in after Alexis Sanchez's cross came off the post, although there was suspicion of offside.
Just after half-time and Chile were harshly dealt with by the offside flag, after Vargas expertly volleyed David Pizarro's chip into the net.
Peru remained a threat on the break with Farfan heading at Claudio Bravo, before a rapid attack down the right on the hour-mark saw Advincula whip in a cross and Medel's outstretched boot poked the ball into his own net.
Vargas would save Chile, however, as Peru were sent into the third-place play-off for the second straight Copa.
