Murray continued his serene passage into the last four by sweeping past eighth seed Tomas Berdych 6-3, 6-2.
World number one Novak Djokovic also eased into the semi-finals with a 6-3 6-4 over 11th seed Milos Raonic.
Nadal is looking to break Argentine legend Guillermo Vilas's record for clay-court tournament wins with his 50th and a fifth title in Madrid this weekend.
However, to do so he will have to avenge Murray's only ever victory over the 14-time Grand Slam champion on clay in last year's Madrid final.
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"I can't think about last year, it is a different year with completely different sensations. I hope the result isn't the same."
Nadal may also have the elements against him with more rain forecast for Saturday after struggling mightily against Sousa after the roof was closed midway through the second set due to the unusually inclement weather in the Spanish capital.
The Spaniard got off to a flying start as he took the first set for the loss of just 10 points.
Sousa won four of the next five games to level the match.
Yet, the world number 35 let the pressure get to him when serving 3-4 down in the decider as a double fault handed Nadal the vital break and he served out to reach the last four.
"The problem wasn't that the roof closed, but that the balls got very wet," added Nadal.
"Apart from the 20 minutes stoppage, which didn't help, the problem was the balls were very heavy and then in the third set with new balls it was completely different."
"I think he's definitely playing better for sure, I also think I'm playing better than I was this time last year," said Murray.
"A lot depends on the conditions. It is pretty different to Monte Carlo, it is supposed to rain here the next few days and playing indoors changes things."
Djokovic remained on course for his fifth title of the season by extending his unbeaten record over Raonic to seven matches.
The Serb created regular opportunities to break despite the Canadian's booming serve, but needed just one break in each set to set up a semi-final meeting with Kei Nishikori.
Nishikori had to wait until the fourth game of the final set to finally break the Kyrgios serve after the first two sets were shared in tie-breaks.
In the women's Madrid Open, world number seven Simona Halep reached her first final of the season in comprehensive fashion with a 6-2, 6-0 thrashing of Australian Sam Stosur.
Halep will face Dominika Cibulkova in Saturday's final after the Slovakian celebrated her 27th birthday in similar style with a 6-1, 6-1 demolition of American qualifier Louisa Chirico.
Cibulkova made the most of Chirico's inexperience on her first WTA semi-final as she dominated the world number 130 throughout to seal victory after just an hour on court.