Wales forward Gareth Bale scored as European champions Real Madrid eased into the Club World Cup final with their 21st successive win.
Defender Sergio Ramos headed in Toni Kroos' cross for the opener, before striker Karim Benzema powered in.
The Mexican side missed a penalty just before half-time and Bale's header punished them after the restart.
Isco smashed in the fourth to confirm Madrid's place against San Lorenzo or Auckland City in Saturday's final.
Azul provided little resistance to a near full-strength Madrid team which contained Ballon d'Or favourite Cristiano Ronaldo and Bale.
But Carlo Ancelotti's men almost allowed Azul back into the tie shortly after the restart when Ramos brought down Mariano Pavone in the penalty area.
However, Madrid keeper Iker Casillas correctly decided to dive down to his right to push clear Gerardo Torrado's spot-kick.
Surprisingly, Ronaldo, who had scored 10 times in his previous eight matches, had few chances to net his 33th goal of a productive season.
But the Portugal skipper did create the second-half goals for Bale and Isco which confirmed Madrid's place in the final.
Madrid will face either South American champions San Lorenzo or Oceania champions Auckland City, who meet in their semi-final on Wednesday.