After racing to a 5-0 lead in the first set, Federer had to work hard to overcome the 16th-ranked Verdasco 6-3, 3-6, 7-6 (5) in 2 hours, 14 minutes in the Australian Open tuneup tournament.
Federer won the eight-man tournament in 2005 and uses the format to fine-tune for the first Grand Slam event of the season.
When the Australian Open starts Monday, second-ranked Federer will be bidding to equal Pete Sampras' record 14 Grand Slam singles titles.
Federer has won three Australian titles - in 2004, '06 and '07 - and has reached the semifinals for five straight years, losing at that stage last year to eventual champion Novak Djokovic.
Federer lost the Wimbledon title after five years to Rafael Nadal in an epic final last season, soon after losing the French Open final to the 22-year-old Spaniard.
Federer rebounded to win the U.S. Open for his 13th major and is confident or breaking Sampras' record.
"I feel like I'm fit enough, motivated enough, experienced enough that I can win many more,'' Federer said. "The question is how many this year, if at all, or in the next year ... I'm excited about the future.''
Federer, who will meet either Swiss compatriot Stanislas Wawrinka or Chilean Fernando Gonzalez in Saturday's final, gave his fans some anxious moments Thursday.
He admitted to lapses in the second set, when he let Verdasco back into the match.
Verdasco, who helped Spain win last year's Davis Cup final over Argentina while top-ranked Rafael Nadal was sidelined with a knee problem, seemed overawed at the start against Federer.
He was overcooking his forehand, his preferred side, and his weaker backhand was repeatedly exposed.
Federer broke Verdasco twice and fended off six break points, coming back from 0-40 in his third service game, to take a 5-0 lead before the Spanish player rallied to win three straight games.
Federer wasted a set point before dropping a service game and had two more set points in a long eighth game, which went to deuce six times, before Verdasco held to close the gap to 5-3.
Federer held at love, closing out with a powerful overhead.
The second set went with serve until the eighth game when, after leading 40-0, Federer was broken.
Verdasco held in the next game to finish off the set in 28 minutes and level the match.
The 25-year-old Spaniard saved a breakpoint in the sixth game of the final set, and then was unable to convert two of his own in the next game as Federer took a 4-3 lead.
Federer was pushing hard for a break but was unable to convert despite dictating rallies, with Verdasco defending well to force a tiebreaker.
Federer led the tiebreaker 6-2 but needed three match points before finishing off.
In the earlier match, Marcos Baghdatis of Cyprus beat Croatia's Ivan Ljubicic 7-6 (3), 6-4 in the relegation group.
Messi, Xavi Relieved With Barcelona’s Comeback Win
Federer, Wawrinka progress at Kooyong
Murray tops Federer in exhibition in Abu Dhabi
