The Japanese third seed swept past the American veteran 6-3, 6-4 on Rod Laver Arena in front of thousands of fans allowed back in after Melbourne lifted a snap five-day lockdown.
The Japanese three-time Grand Slam champion overcame the Taiwan world number 71 unorthodox style 6-2, 6-2 in an all-Asian quarter-final at a crowd-less Rod Laver Arena.
The see-saw contest continued in a tense decider with Osaka unable to convert a break point in the fourth game only to subsequently drop her serve and slam her racquet to the ground in frustration.
Australian Open organisers announced Friday that players would compete in a biosecure "bubble" after the host city was ordered into a snap five-day lockdown, with spectators banned.
Gauff, 16, was one of the Australian Open's biggest success stories last year as she stunned Venus Williams, Sorana Cirstea and Naomi Osaka en route to the fourth round.
I'm going to go out there and have fun," Gauff said. "She's a great player and I know it's going to be a tough match, but I'm just going to embrace the opportunity and try to play well under the pressure.
"Going into this match I was really nervous and I actually had a really bad dream about it," Osaka told.
For me, my dreams are very telling of the future. Like, usually I have dreams and they come true. Last night I had a dream that I lost this match, and I really didn't feel good about it.
Osaka, whose flashy attire included leggings and pink shoes, skirt and wristbands, won the first four games and continued the momentum as she relentlessly worked Pavlyuchenkova around the court with powerful groundstrokes.
Osaka then lifted her intensity, opening to a 4-0 lead before Boulter unexpectedly peeled off three straight games. But the Japanese star refocused to force a deciding set, which she ran away with.
The 26-year-old Ukrainian, who has never reached the final of a Grand Slam, played her first match in Melbourne since emerging from the 14-day mandatory quarantine.
Djokovic earlier told reporters he had taken a walk in a park to celebrate his release from the 14 days of quarantine players coming from overseas were obliged to undergo to play in Australia.