A commanding performance will give Croatia the opportunity to win their first Water Polo gold medal as an independent country on Sunday.
The 7-5 win over their Balkan neighbours extends Croatia's 100 per cent record in the London 2012 tournament to seven wins from seven.
They were strong in defence and ruthless in attack and the scoreline flattered Montenegro, who were wasteful in possession.
Croatia - known as the Barracudas - powered to a four-goal lead at half-time.
Montenegro - who call themselves the Red Sharks - rallied in the second half to outscore their opponents by two, but they never looked capable of clawing back the deficit.
Montenegro had 31 shots to score their five goals (16.1 per cent), compared to Croatia's 24 for their seven scores (29.2 per cent).