Thompson will face Barbara Berkmeyer in Thursday afternoon's final match as Berkmeyer advanced thanks to a 3-and-1 victory over Marsha Butler in the other semifinal.
In a rematch of last year's final, Thompson, the three-time defending champion, built a 3-up lead around the turn but trouble loomed. She missed two short par putts at 10 and 11 to trim her lead to 1-up.
At the par-4 14th, Thompson knocked her approach to the lip of the hole for the conceded birdie. That put her 2-up but Carr could not be counted out. Carr chipped to four feet to save par at the 17th and Thompson missed a six-foot par save to cut the advantage to 1-up with one hole to play.
Thompson sealed the win on 18 with an eight-footer for par and now it's more opportunities for history.
Thompson extended her record for consecutive match victories at a USGA Championship to 23. She can become the second player in the event's history to win four titles in a row, after Carolyn Cudone took the title from 1969-1972.
'I can't believe I'm in the final again,' said Thompson. 'I've just been scraping by this week.'
Berkmeyer was more in control of her match than Thompson. Berkmeyer took a 1-up lead with a bogey at seven and added to her lead at the par-5 15th at Mid-Pines Inn & Golf Club. Butler made birdie at the hole but Berkmeyer trumped her with an eagle to go 2-up.
Butler conceded the match at No. 17 when she failed to get up and down out of a greenside bunker.
'It's an interesting golf course,' said Berkmeyer, who has never faced Thompson. 'I have a very good caddie who can the read the greens. Donald Ross golf courses aren't my favorites.'