Tebogo, the reigning world bronze medallist, overtook the American 100-metre champion on the bend and cruised the rest of the way unchallenged to finish in 19.96 seconds. Lyles had to work hard to finish second in 20.08.
Americans Kenny Bednarek, Olympic silver medallist in Tokyo, and Erriyon Knighton each won their semi-finals, Bednarek clocking 20.00 and the 20-year-old Knighton crossing in 20.09.
Rounding out the field for Thursday's final are Alexander Ogando of the Dominican Republic, Joseph Fahnbulleh of Liberia, and Zimbabwe's Tapiwanashe Makarawu and Makanakaishe Charamba.
Lyles, the three-time reigning world champion over what has always been his stronger event, has not lost over the distance since he had to settle for bronze at the 2020 Tokyo Olympics.
His run on Wednesday, however, was reminiscent of his sluggish 100m semi-final after which he reached out to his therapist for guidance. He came out two hours later and electrified the crowd by winning the most competitive men's 100m in Olympic history.
Lyles is looking to become the first American in four decades to win the Olympic sprint double. He is aiming for potentially four golds in Paris, in the 100m, 200m, 4x100m relay, and - if he is selected in the squad - the 4x400m relay.
Canada's defending champion Andre de Grasse, the last man to beat Lyles in a competitive race over the distance, did not advance to the final.
