The world number nine from Spain prevailed 6-3, 4-6, 7-6 (7/4) in two hours and 22 minutes after hitting 32 winners and 12 aces.
“We both went to the limit today. We both broke into the top 100 a few years ago and now we are playing in a big final,” Badosa said after defeating the fourth-ranked Czech.
They are on course to meet again at the quarter-finals of the Australian Open when it starts next week.
The 24-year-old Badosa is eyeing a breakout Grand Slam tilt with her quarter-final effort in last year’s French Open — which Krejcikova won — her deepest run at a major.
She will enter Melbourne Park confident after her third straight victory over Krejcikova, having won both their previous matches in straight sets last year.
This was far tougher with an aggressive Krejcikova confidently approaching the net early, but it failed to rattle Badosa, who drew first blood.
Krejcikova edged ahead early in the second set and overcame service wobbles to force a decider.
Sticking to the script, the topsy-turvy contest saw Badosa gain an early break of serve before Krejcikova immediately hit back.
But Krejcikova was on the brink and two points from defeat in the 10th game before serving strongly to prolong the contest.
They showed no signs of fatigue, upping the ante with superb winners in a tense tie break.
Badosa, however, kept her composure and fell to the ground in celebration after Krejcikova’s forehand slammed into the net.
Krejcikova, who had saved seven match points against Anett Kontaveit in the semi-finals, plays world No.72 Andrea Petkovic in the first round of the Australian Open.
Badosa starts against home favourite and No.45 ranked Ajla Tomljanovic in a potentially tricky first round match, although she beat the Australian in straight sets in the round of 16 in Sydney.
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