World number two Alcaraz needed to win to ensure a spot in the last four on his debut appearance at the season-ending tournament.
And he did just that in impressive fashion against Medvedev, cruising to a straight-sets victory which ensured him first place regardless of what happens in Friday night's match between Alexander Zverev and Andrey Rublev.
He also gained a small measure of revenge for defeat in the US Open semi-finals against Medvedev, who finishes second in the group after having already qualified for the semis on Wednesday.
Alcaraz came into the Finals struggling with form and injury but has warmed up as the tournament has progressed and his semi-final with Djokovic on Saturday promises to be a blockbuster.
Djokovic, who has already secured the year-end top spot in the world rankings, is gunning for a record-breaking seventh Finals triumph.
Medvedev, the 2020 Finals champion, will now face home hope Jannik Sinner, who became the first Italian ever to reach the semis on Thursday.
