Woods, a 14-time major champion seeking a fourth WGC Match Play title, defeated McIlroy 2&1 in a morning knockout match only to fall 1-up to the 50th-seeded Dane, dropping the 18th hole when he missed a four-foot par putt.
After winning his group earlier this week, Woods set up a match with Rory McIlroy.
Woods then moved out front with a six-footer at the 12th and got the crowd excited with an eagle from 82 yards. The Italian will play Kevin Kisner, who won three holes in a row to beat Louis Oosthuizen 2&1.
Elsewhere, Francesco Molinari enjoyed a far more serene round to a semifinal meeting with Kevin Kisner.
Woods recovered well from a wayward tee shot at the 15th before driving into the lip of a bunker at 16, but McIlroy endured a worse nightmare that proved pivotal. "We've played tournaments together, battled each other down the stretch at events, but never in a match play situation, so this will be fun".
The match was tied going to the par-4 18th.
"I'm pretty proud to say I beat Tiger Woods".
"I kind of made a mess of things with the hole", he said, "I$3 ended up making about a 15-footer for a bogey".
"It is a loss of hole, I understand that, the only issue was, Kuch was like "I didn't want to take the hole, and do it like this".
NCAA men: OR 72, Wisconsin 54
On Friday, the Badgers couldn't do either one, as fifth-seeded Wisconsin fell to 12th-seeded OR , 72-54, in the Round of 64. It would be pretty incredible considering OR needed to win the Pac-12 Tournament just to get in the NCAA Tournament.
Kisner will now face Louis Oosthuizen, a 2 and 1 victor over Marc Leishman, while Open champion Molinari meets Kevin Na.
Kisner, last year's runner-up, birdied four of the first five holes in routing China's Li Haotong 6&5.
Having fought back valiantly from three down with seven holes to go to just one in arrears, he produced a stunning 395-yard drive down the par five 16th and had just a wedge in his hands for his approach.
Reigning British Open champion Francesco Molinari, Europe's Ryder Cup hero in beating the U.S. team a year ago in France, eliminated English 10th seed Paul Casey 5&4.
Fresh off an wonderful left-handed shot on a ball that was under a bush during Thursday's action, Tiger continued the theatrics on Friday afternoon by sinking an 82-yard wedge shot on the par-4 13th for an eagle 2.
He was about only 100 feet from the hole, but McIlroy pitched long, over the green, and with spectators scurrying out of the way, the ball came to rest against a wooden bulkhead.
Woods then finished the job by coolly sinking the putt to save par.
Woods ended the match after McIlroy almost holed a long birdie putt at the 17th.
McIlroy, who had finished in the top six in each of his six events this year, including his win at the Players, will be credited with a tie for ninth in his final start prior to the Masters.
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