It marked the 25th time the illustrious tennis siblings had squared off but the first time Venus had come out on top since a 2009 semi-finals encounter in Dubai.
Despite the loss, world number one and defending champion Serena holds a 14-11 edge in their head-to-head showdowns after coming out on top in their previous five encounters, including the 2009 Wimbledon final.
But clashes which at one time were an almost a regular and welcomed occurrence on tennis courts across the globe have become rarer-and-rarer with their meeting in Montreal just the second since the 2009 Tour championships.
Venus enjoyed the first break of the match but Serena hit back to make it 3-3 and then won a tie-break in the first set.
However, Venus broke in the first and sixth games of the second set to take it 6-2 and a single break in the last won her the match.
"The level of game we played was pretty high," Venus said. "We're both serving well, returning well, moving well - everything is happening so well that all of our matches seem to be very competitive."
Serena said she was impressed with her sister: "She was really opening the court well.
"She's such a good mover. She moves really well. I think her serve was way more consistent than mine. I had more aces, but she served better. Ultimately I think she returned better as well, so, yeah."
There was little excitement when the match was decided, the two sisters walking slowly to the net and hugging briefly.
Venus' reaction at ending her sister's Roger Cup title defence was muted as she turned and offered a small wave to the crowd before slumping into her courtside chair and staring blankly across the court.
The older Williams will now await the winner of the other semifinal between third seeded Agnieszka Radwanska of Poland and Russian Ekaterina Makarova.
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