The 23-year-old Australian followed victories over multiple grand slam winners Stan Wawrinka and Rafa Nadal with a hard-fought win over Isner, the American who sits 63 places above him in the world rankings.
Of the victory, Kyrgios said: "It was an amazing, fun match with John today. I was pretty pumped because I knew there wasn’t going to be a lot of running.
"He’s a good mate of mine and has always been incredibly supportive. To go out and battle against him was a special moment for me.”
'I was going through really rough times' - Kyrgios after comeback triumph
Break points and chances were few and far between in sultry conditions on Mexico's Pacific coast with each player struggling to find that little bit extra.
Isner won more points on serve and return overall but the temperamental Aussie came through when it mattered, particularly in the third set tiebreak, which he finished with a masterful drop shot from the base line.
He will next meet world number three Zverev, who beat Briton Cameron Norrie 7-6(0) 6-3 in the earlier semi-final.
Kyrgios and Zverev have shared the spoils of their previous six meetings with three victories each, however, Zverev won their previous two matches last year.
On the forthcoming final, Kyrgios admitted anticipating a battle.
He said: "This is going to be an incredibly tough match. He’s an amazing player, very professional, ticks all the boxes.
"I grew up playing juniors with him, so I know him very well. It’s going to be a lot of fun."
Additional reporting by Reuters.
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