The wild win put the South Americans in the tournament's last four for the first time since 1970. It eliminated the last of six African teams in the tournament and denied the continent its first-ever semifinalist.
Sebastian Abreu chipped in his penalty kick to give Uruguay the victory. It will play the Netherlands in the final four.
Ghana missed twice in the shootout, but wouldn't have been there had Asamoah Gyan, who made two penalty kicks earlier in the tournament, not hit the crossbar on the final play of overtime.
So Uruguay, once a soccer power, most recently an afterthought, travels to Cape Town for Tuesday's semifinal. The last nation to make the tournament, it needed a playoff against Costa Rica just to get in. Now it is one step from the title match.
"To be among the four best (teams) in the world, there are no words for that," star striker Diego Forlan said. "We felt we were going to faint with each penalty."
Ghana carried the weight of an entire continent's soccer hopes — the other five African nations did not advance — and became the third African team to exit in the quarterfinals of a World Cup. The Black Stars couldn't replicate the opportunism they used to beat the United States in extra time six days ago.