The hosts, seeded sixth in the Men's World Group II division, achieved the milestone in style with the doubles pairing of Evans Maripa and Sydwell Mathonsi posting a thrilling 5-7, 6-3 (10-2) win over Philippe Bedard and Corey Blatchford.
Earlier, South Africa and Canada, seeded third, had each won a singles match.
Mathonsi was delighted to have played an influential role in helping his team reach the last four for the first time in South Africa's nine-year participation at the event.
"The wasn't the best of matches in terms of entertainment but we ultimately won the match and that was great for team South Africa," said Mathonsi.
"It will boost the confidence in the team ahead of our semifinal match against Japan.
"Beating Canada is in itself an achievement and we were really playing against history so this will be one milestone team South Africa will be very proud of."
They were nonetheless overpowered by Japan in the semifinals.
In the opening singles clash, Takashi Sanada blew away Maripa 6-1, 6-2, while Mathonsi went down 7-5, 6-1 to Satoshi Saida to give the Japanese an unassailable 2-0 lead before they clinched the doubles encounter to round off the whitewash.
South Africa's Kgothatso Montjane defeated Chile's Mantonieta Ortiz 6-7(1), 6-3, 6-0 in a Women's World Group clash, but Montjane's teammate, Rose van der Meer, wasn't quite up to the task and was peppered with a show of power tennis by Chile's Francisca Mardones, who bagged a 6-3, 6-1 win.
In a Junior Group A encounter, South Africa whitewashed neighbours Zimbabwe 3-0.
Results - 28 April 2011
Mens World Group II
Quarter-finals
[6] South Africa bt [3] Canada 2-1
Philippe Bedard (CAN) bt Evans Maripa (RSA) 6-2 6-4
Sydwell Mathonsi (RSA) bt Yann Methieu (CAN) 7-5 6-0
Evans Maripa (RSA)/Sydwell Mathonsi (RSA) bt Philippr Bedard (CAN)/Corey Blatchford (CAN) 5-76-3 10-2
Semi-finals
[2] USA bt Chile 2-1
Jon Rydberg (USA) bt Cristian Aranda (CHI) 6-0 6-1
Steve Welch (USA) bt Robinson Mendez (CHI) 4-6 6-3 6-4
Cristian Aranda (CHI)/Robinson Mendez (CHI) bt Jon Rudberg (USA)/Steve Welch (USA) w/o
[1] Japan bt [6] South Africa 3-0
Takashi Sanada (JPN) bt Evans Maripa (RSA) 6-1 6-2
Satoshi Saida (JPN) bt Sydwell Mathonsi (RSA) 7-5 6-1
Yoshinobu (JPN)/Takashi Sanada (JPN) bt Evans Maripa (RSA)/Marshall Marsh (RSA) 6-1 6-1
Semi-finals
[1] USA bt [4] Canada 3-0
Nick Taylor (USA) bt Adrian Dieleman (CAN) 6-1 6-0
David Wagner (USA) bt Sarah Hunter (CAN) 6-1 6-2
Nick Taylor (USA)/David Wagner (USA) bt Adrian Dieleman (CAN)/Gary Luker (CAN) 6-0 6-1
[3] Israel bt [2] Great Britain 2-1
Noam Gershony (ISR) Jamie Burdekin (GBR) 6-4 6-4
Peter Norfolk (GBR) bt Shraga Weinberg (ISR) 6-4 7-5
Noam Gershony (ISR)/Boaz Kramer (ISR) bt Antony Cotterill (GBR)/Peter Norfolk (GBR) 7-5 6-3