The Netherlands defeated England 4-3 in a penalty shootout after their semifinal was locked at 1-1 following extra time yesterday.
Hannah MacLeod gave England a 1-0 lead in the 56th minute before Maartje Paumen equalized in the 61st. Kim Lammers scored the winning penalty for the Dutch.
Argentina defeated Germany 2-1 via goals from Luciana Aymar and Rosario Luchetti. Both the Dutch and Argentina have won their six matches in the tournament ahead of Saturday's final.
"It was a very tough match," Netherlands coach Herman Kruis said. "The first half we missed opportunities. And then England scored in the second half. We tried to force the match and go on the outside and get the penalty corners. ... I was very proud of my players to make the penalty strokes."
Added England coach Danny Kerry: "I agree with Herman. I am incredibly proud of our team. It is difficult for me to say, but I think the Netherlands deserves their place in the final and we pushed them very close."
England player Helen Richardson tried to be philosophical.
"In the 11 years I have been playing international hockey this is the farthest we have (pushed) the Netherlands and it shows how far we have come," she said.
The Netherlands has now reached four straight World Cup finals, and 10 overall.
Argentina is in the final for the fifth time, but the first since 2002. Only the Dutch have been in the final more times.
"It was incredible how we played," Argentina's Aymar said. "We managed both halves well. I think it was our best game in the tournament. I am very happy. It was a dream semifinal."
Maike Stockel scored for Germany, which will face England in the third-place game.
Japan defeated Spain 2-1 to finish in 11th place.
Kaori Chiba scored the late winner for Japan. Ai Murakami also scored for Japan, and Montserrat Cruz struck Spain's goal.
Japan lost several close matches in the tournament, including two 2-1 defeats to Germany and Australia.