The Netherlands took the lead after just over half an hour when Donyell Malen finished off a neat attack.
But Croatia showed will in the second half. First, they were awarded a penalty after Luka Modric was brought down by Cody Gakpo. It managed Andrej Kramaric.
With just over a quarter of an hour left of the game, Mario Pasalic scored 2-1 after an input from the left wing.
In the final minutes, Gakpo had a great opportunity to equalise, but he got a mishit and missed the target. At the time, most people probably thought that the game was decided, but in the 96th minute Noa Lang equalized for the Netherlands after a messed up situation.
The match went to extra time and Bruno Petkovic became the big hero when he fired in a heavy shot from long range just seven minutes after he was substituted.
It was eventually 4-2 after Luka Modric set up the result on penalties.
The second semi-final will be played tomorrow between Spain and Italy.
The bronze medal match and the final will be played in Enschede and Rotterdam respectively on Sunday.
Portugal were the first to win the men's Nations League when they lifted the trophy in 2019. The defending champion is France.