Nadal tried to play through the pain but when Del Potro blasted a forehand victor to go ahead 7-6 (3) 6-2 the Spaniard removed his headband and said he could not continue.
Nadal, who had never before retired from a U.S. Open match, showed signs of distress nearly from the start as he limped noticeably after a grueling 69-minute opening set. He also took advantage on a lack of power in Nadal's serve, winning 61 percent of Nadal's second serves.
Nadal, a 17-time Grand Slam champion, mentioned retirement to the chair umpire midway through the second set, then threw in the towel after dropping the set.
"I hate to retire, but, to stay one more set out there playing like this, it would be too much for me", Nadal said.
"I know what is going on with the knee".
"You could imagine it was very hard for me to say goodbye before the match finishes", said Nadal, who added that he had been dealing with his knee woes since the early rounds.
"But no, was not the day". In the final when I beat Rafa and then Roger I was a kid then, but now I am much older'.
With this in mind, it's certainly hard to make a case for Nishikori as an underdog tonight, and I want to move on to the other match-up, the first quarter-final, between top seed Rafa Nadal and Juan Martin Del Potro.
When Rafael Nadal finally finished a almost five-hour climb into the U.S. Open semifinals, he thought backward as much as ahead.
Nishikori, Osaka book trips to US Open semis
Keys punched her ticket with a victory over Carla Suarez Navarro on Wednesday. It was just the latest in what's been a dominant run for Osaka .
Nadal came through an enthralling five-set quarter final with Dominic Thiem in which he lost the first set 0-6 before rallying to clinch the match on a tie-break in the deciding set.
All four semifinalists were past finalists at Flushing Meadows, the first time that's happened at the U.S. Open since 2011.
"This year have been a fantastic year until this moment", said Nadal. I had an issue in the second or third match. Two of them I had to retire. This was the sixth win for the Argentinian over the 17-time Grand Slam champion and the second in best-of-five matches after that triumph in NY nine years ago.
"That's frustrating. Is tough for me".
"I have fought all my career against these kinds of things too".
"I can not compare the knee with other times because the pain on the knee is always very similar", he said. And while he still had the devastating forehand that's been one of tennis' signature shots and carried him to the 2009 title, repeated wrist injuries had made him one dimensional on the backhand side.
"It means a lot to me", del Potro said. "I am still here". They are the first pair to win Wimbledon and the U.S. Open in the same year since Jonas Bjorkman and Todd Woodbridge in 2003.
The top-ranked Spaniard plays third-seeded del Potro, and No. 6 seed Djokovic meets No. 21 Kei Nishikori in Friday's other semifinal.
Nadal has reached four Grand Slam finals in the last two years - winning the US Open in 2017 and back-to-back French Open titles in 2017 and 2018.