Tiafoe twice led in the match but the final set lasted just 27 minutes in which he was broken three times and collected just nine points.
"I was the better player for sure tonight. In the fourth set, I just had some in-and-out cramps. I felt like my body just kind of shut down on me," said the 20th-ranked Tiafoe after his 4-6, 7-5, 4-6, 6-4, 6-1 defeat.
As Fritz celebrated becoming the first American man to reach a Grand Slam final since Andy Roddick in 2009, Tiafoe was left to rue a second US Open semi-final loss in his last three appearances.
In 2022, he lost another five-setter against eventual champion Carlos Alcaraz.
"Probably had a lot to do with nerves. I wasn't tired at all," Tiafoe said.
"The closest I was obviously when I played Alcaraz I was kind of hanging for dear life to go five. Here I was really in a position to win. I got ahead of myself and I promise it's not going to happen to me again."
World number 12 Fritz, meanwhile, will face top-ranked Jannik Sinner in Sunday's final having never previously got past the quarter-finals of a Grand Slam.
He will attempt to become the first American man to win a Grand Slam title since Roddick at the 2003 US Open.
"It was a crazy match. A lot of it was about handling the moment and the pressure," said Fritz.
"He was playing at such a high level in the third and fourth sets. It was about staying in it, withstanding the pressure and hope that at a certain point the errors would come. It got to that point in the end."
This year's US Open was thrown wide open by the first week exits of four-time champion Novak Djokovic and Alcaraz.
Fourth-ranked Alexander Zverev also failed to make the semi-finals.
