Federer won, 6-2, 7-6 (8), and will face fourth-ranked Novak Djokovic in today's final. Djokovic earned his second consecutive appearance in the final and ended his own five-match losing streak against No. 3 Rafael Nadal with a 6-1, 6-4 win in the other semifinal.
Federer never faced deuce while serving, keeping Murray on his heels in the first match between the tour's top two players in the history of the $3-million Western & Southern Financial Group Masters.
"I was just happy that I managed to keep it close in the second set, because I returned poorly and served poorly," said Murray, who had one set point in the tiebreaker at 8-7 before going wide with a backhand.
"Against Roger, if you do both of those things, it's going to be very difficult."
Federer was leading the tiebreaker, 9-8, when Murray double-faulted to lose to the top seeded player for the first time in five matches since the final of last year's U.S. Open.
Federer took control of the first set when Murray hit a backhand long on break point in the fourth game. Federer clinched the first set when he successfully challenged a call on his second break point of the eighth game.
Djokovic, who lost to Murray in last year's final, came out aggressively against Nadal. The Serb fired five aces and 13 winners in the first set, including a backhand passing shot to break Nadal in the fourth game.
Djokovic gained an edge in the second set when Nadal knocked a backhand into the net on break point in the fifth game, but he maintained the pressure, finishing with 21 winners to Nadal's 10.
Maria Sharapova advanced to the final of the Rogers Cup with a 6-2, 4-6, 6-4 victory over Russian compatriot Alisa Kleybanova in Toronto.
Sharapova will face fourth-seeded Elena Dementieva in the tournament's first all-Russian women's final. Dementieva beat second-seeded Serena Williams, 7-6 (2), 6-1, in the first semifinal.
Sharapova, who missed nearly a year because of a shoulder injury, will be making her first appearance in a final since April 2008.
Kleybanova, who needed 3 hours 16 minutes to beat No. 5 Jelena Jankovic in the quarterfinals the previous night, was up, 3-1, in the third set.
However, Sharapova clawed back, breaking Kleybanova twice to roar ahead 5-4.
She then closed out the 2-hour 37-minute marathon with consecutive aces, her fifth and sixth of the match.
Burress preparing for prison life
Plaxico Burress' attorney says a prison consultant is preparing the former Super Bowl star for life behind bars.
Benjamin Brafman told the New York Post in an article published Saturday that the ex-New York Giants wide receiver is getting advice on "how to use his period of confinement as productively as possible."
The 32-year-old Burress pleaded guilty Thursday to one count of attempted criminal possession of a weapon. He had accidentally shot himself in the thigh at a Manhattan nightclub in November.
His plea deal calls for a two-year prison term. He is to be sentenced Sept. 22.
Indiana to honor ex-coach Knight
Former Indiana basketball coach Bob Knight will be inducted into the university's athletics Hall of Fame nearly a decade after he was fired for violating a zero-tolerance policy imposed by former president Myles Brand.
The announcement by Indiana is the first move to bring the two sides together since Knight was fired in 2000 for what school officials called a "pattern of unacceptable behavior."
"I am honored to have been a part of selecting this outstanding class of tremendous coaches and student-athletes," new Athletic Director Fred Glass said in a statement. "For my first Hall of Fame class to include heroes from my childhood as well as my student days is a dream come true."
Whether Knight will attend the Nov. 6 induction ceremony in Indiana is unknown. He has not returned to IU since his firing, which caused a rift among Indiana basketball fans, led to the resignation of his successor, former assistant Mike Davis, and saw the storied program tarnished by recruiting violations under Kelvin Sampson.
Armstrong is 20th in Ireland
Britain's Mark Cavendish won the second stage of the three-day Tour of Ireland, with Lance Armstrong 26 seconds behind the overall leader in Killarney. Armstrong also received Cavendish's time of 5 hours 7 minutes 33 seconds. The Texan finished 74th and is in 20th place overall.
Russell Downing kept the race leader's yellow jersey by five seconds over Russia's Alexander Kolobnev.