A win for the Spaniard in Sunday's final against either Daniil Medvedev or Stefanos Tsitsipas will break a three-way tie with Novak Djokovic and Roger Federer and give him sole ownership of the record.
With rain bucketing down outside, the 35-year-old Nadal made a fast start under the closed roof of the Rod Laver Arena and took control by breaking Wimbledon finalist Berrettini's serve early in each of the first two sets.
Nadal's vicious top-spin forehand did most of the damage early on, pinning Berrettini down behind the baseline and leaving him very little time to produce his big groundstrokes.
"I started the match playing great. First two sets have been one of the best so far since a long time," Nadal said on court.
"I know how good is Matteo. He's a very solid player, very dangerous. In the third I knew at some point he's gonna go for the shots.
"We need to suffer and we need to fight. That is the only way to be where I am today. Honestly, it means a lot to me to be in the final here again."
Just when it looked as if the match would go the same way as their only previous meeting, when Nadal won in straight sets at the 2019 US Open, Berrettini came alive.
He started forcing Nadal back with heavy forehands in the third set and a first break of serve for the 25-year-old Italian in the eighth game forced a fourth.
Nadal then got the crucial break in the eighth game as the Italian's unforced errors increased and another mistake -- his 39th compared to his opponent's 19 -- allowed the 2009 champion to convert his first matchpoint after a battle that lasted two hours and 55 minutes.
It will be the 29th major final for Nadal on Sunday and a second title at Melbourne Park would make him only the second man after Djokovic to win every Grand Slam title twice since the sport became professional in 1968.
"I have been a little bit unlucky during my career with some injuries and other times I played amazing finals with good chances," said Nadal, who will play in his sixth Australian Open final. "I was close a couple of times.
"I feel very lucky that I won once in my career in 2009 but I never thought about another chance in 2022."