Nottinghamshire looked nailed on for their third appearance in the final when they needed 11 off the last two overs with eight wickets in hand.
But Pat Brown bowled a sensational 19th over, removing Dan Christian (15) and Tom Moores (1) before Steven Mullaney was run out.
Nottinghamshire were still in control with seven required from the final over and Ben Duckett well set, but Wayne Parnell, whose three previous overs had gone for 37, restricted Duckett and Samit Patel to five runs from the first five balls. Nottinghamshire only needed one off the final delivery to tie and progress having lost fewer wickets but Duckett (49) failed to make contact with a yorker-length delivery and Parnell wheeled away in celebration with his ecstatic team-mates in pursuit.
It was a brilliant comeback by the holders, who looked down and out after they posted a modest 147 for 9, having been put in.
Outlaws’ openers Alex Hales and Chris Nash couldn’t reprise the stand of 165 that obliterated Middlesex in the quarter-final, but they still laid a solid platform with 51 in the powerplay with Nash making 24 off 16 balls, including 18 off Parnell’s first over.
Hales and Duckett looked untroubled as they took the score to 100 in the 14th over. Hales made 52 off 42 balls, but when he feathered an edge off Moeen, whose four overs went for just 13, Worcestershire sensed they had a chance.
Brown, who took 31 wickets in last season’s triumph, delivered again in the penultimate over. Christian (15) failed to clear mid-off, Moores (1) holed out and Mullaney needlessly ran himself out coming back for a second run as the pressure began to tell. Parnell then produced the perfect final over.
Earlier, Nottinghamshire took wickets regularly and only Rikki Wessels (34) and Ross Whiteley, who made 36 off 24 balls at the back-end of the innings, got on top of the bowling.
Their mood soared when off-spinner Matt Carter came back in the fifth over to remove Rapids’ skipper Moeen, whose brilliant unbeaten hundred had propelled his side to Edgbaston against Sussex Sharks in the semi-final.
Ali looked in the mood for a repeat performance when he lofted his second and third balls in Carter’s first over over long on for six but Carter had his revenge when Ali lost his off stump hitting across the line.
Worcestershire struggled for momentum thereafter, losing wickets regularly against some accurate bowling and fielding. Nottinghamshire also caught well, Hales’ acrobatic effort at extra cover to remove the dangerous Hamish Rutherford the pick of their catches.
Wessels was fifth out, bowled off his pads by Mullaney in the 12th over and it was left to the clean-striking Whiteley to get his side to a half-decent total. He struck Mullaney for two sixes and a boundary in the 17th over, which yielded 17 runs, before he was caught on the mid-wicket boundary in the final over. On a good pitch and fast outfield their 147 for 9 looked 20 runs light, but Moeen’s faith in his bowlers at the death paid off.
Outlaws head coach Peter Moores said afterwards: "I can't remember a game like that, it's quite difficult to explain. It's as gutting a loss as I can remember.
"With a couple of overs to go it felt like we couldn't lose but Worcestershire, to their credit, bowled brilliantly.
"In those situations you trust the players in the middle. We knew one more boundary in those last couple of overs would have been enough and Ben Duckett, who played brilliantly, is distraught that he couldn't get us over the line."