Sabalenka beat Pegula in the 2024 final in Flushing Meadows and beat her again in the semis last year on the way to a second crown.
Third-seeded Pegula needed two hours and 20 minutes to get past Navarro, recovering an early break in the third set of a tense baseline battle on Arthur Ashe Stadium.
"It was really tough," Pegula said after a match featuring nine breaks of serve. "It was physical, humid. I wasn't exactly serving my best and I was fighting a lot of demons out there today."
Pegula improved to 5-0 against Navarro, a former world number eight who is on the rise after an extended break to focus on health issues, winning her first title in more than a year at Strasbourg in May.
Pegula, who has won two titles this year, is among the trio of players who arrived at Flushing Meadows with a chance to supplant Sabalenka atop the world rankings in New York.
The 32-year-old would have to go all the way to a first major title to have a shot at claiming the top spot.
But the number one issue could be moot by the time Pegula and Sabalenka square off on Thursday.
Second-ranked Elena Rybakina can seize the top spot regardless of other results with a win over China's Zheng Qinwen in their quarter-final on Wednesday.