Spaniard Nadal, who is chasing a sixth title this season, beat Bulgarian Grigor Dimitrov 6-3 4-6 6-1.
The Romanian could take over the top ranking from Garbine Muguruza.
But Kyrgios showed his best side for a Beijing crowd that lapped up his fearsome shot-making and showmanship.
Despite Nadal's one-sided record against Isner, it was a hard-fought contest from the outset, and the American showed off his outstanding serving as he fired down 22 aces, per ProTennisLive. I've played Rafa quite a few times.More news: Ireland stick with Martin O'Neill and Roy Keane
In the second set, the two players stayed 6-6 for a while until a tiebreaker in which Isner's performance declined and the Spaniard took his chance and won the match.
It was the third time in four meetings this season that Kyrgios has come out on top.
Winning the next game was enough for Nadal to avoid another upset by Pouille, who had defeated him in a five-set match at the 2016 US Open last 16. I stopped a little bit to go for the points.
"In general terms, I think I played with not many mistakes".More news: Saudi king, Putin clinch billion-dollar energy, arms deals on
Nadal broke Isner's serve in the 9th game of the first set, which was the only break for the two players during the 104-minute fight.
The Australian will be the underdog against the French and US Open champion but has beaten Nadal this year already when knocking him out of the Cincinnati Masters at the quarter-final stage.
The Frenchman, who was a set down before going on to win 6-7 (5/7) 6-4 6-0, is now 7/4 for his first ATP Tour title with Sky Bet. Krygios was leading 6-0 3-0 when opponent Steve Darcis retired injured, and he will face Alexander Zverev in the next round. Petra Kvitova, the two-time Wimbledon champion from the Czech Republic, faces Caroline Garcia of France or Ukraine's Svitolina in the other semi-final.More news: Walmart Makes New Acquisition To Shorten Delivery Times