London manager Eamonn Phelan hailed his side's resilience after they booked a Croke Park date with Wicklow next Saturday.
For the second week running, Down mustered a late rally to force extra-time, but the Exiles responded positively and a goal from substitute Luke Hand in the first period put them on course for the final.
"It took serious character to respond in the way we did," said Phelan. "These lads are serious hurlers. A lot of our games have been away this year, and we said we weren't going to lose it at home today."
Phelan saw his side get off to a roaring start at Ruislip, Martin Finn atoning for an early penalty miss by drilling in an eighth-minute goal.
The expert free-taking of centre-back Conor Woods kept Down in it, and although they were twice denied by last-ditch London defending late in the half, the Mournemen would have been confident of overturning their 1-7 to 0-5 interval deficit.
However, it wasn't until the midway point of the half that Down found their rhythm. A goalmouth scramble saw Michael Ennis net on 52 minutes and the visitors forced extra-time when Woods slammed home a last-minute penalty.
Down had the wind in the first period but failed to take advantage, and fell behind again through Hand's cool finish after a hit-and-hope ball from Lee Mackey broke his way.
Man of the Match: Brian Costello (London)
Scorers - London: M Finn 1-4 (4f), K Walsh 0-4, J Maher 0-3, L Hand 1-0, PJ Rowe 0-2, T Dunne, J Egan, T Hogan 0-1 each.
Down: C Woods 1-8 (1-0pen, 6f, 1 '65'), M Ennis 1-0, F Conway, E Clarke 0-2 each, P Sheehan 0-1 (1f).
London - D Russell 7; E Walsh 7, B Costello 9, G Fennelly 8; M Walsh 8, D Maher 7, L Mackey 7; C Quinn 7, PJ Rowe 7; P Sloane 6, J Egan 7, S Egan 6; J Maher 7, M Finn 7, T Dunne 7. Subs: K Walsh 8 for S Egan (44), B Smyth 6 for Sloane (60), H Vaughan 6 for J Egan (70), T Hogan 6 for D Maher (72), L Hand 7 for Dunne (75), S Ryan 6 for Quinn (80).
Down - S Keith 7; P Smyth 6, M Hughes 7, S Ennis 6; F Conway 7, C Woods 8, M Cunningham 6; A Savage 7, P Keith 6; P Sheehan 6, M Ennis 6, A O'Prey 6; E Clarke 6, D Hughes 6, M Turley 6. Subs: C Bailie 6 for Sheehan (43), A Clarke 6 for D Hughes (46), E McGuinness 6 for Turley (52), D Hobbs 6 for Keith (h-t in extra-time),
REF - T Carroll (Offaly)