A last-minute penalty from Lionel Messi broke Portugal's resistance and ensured a 2-1 victory for Argentina in a game where both teams had ample chances to win.
Messi's goal added to an exquisite first-half assist which allowed Angel di Maria to give the South Americans an early lead, before Cristiano Ronaldo had pegged them back with an opportunistic finish from close range.
Argentina were surprised from the first whistle as Portugal went immediately on the front foot, but settled down quickly and got their typical incisive passing game into gear.
Messi, Esteban Cambiasso and Ezequiel Lavezzi looked dangerous in combination, and they did not have to wait long for an opener, with the Barcelona star pivotal.
After cutting in from the right hand side, the forward chipped an exquisite pass into the path of Di Maria, who accelerated behind a static defence and beat Eduardo with a composed finish.
It appeared that the Albiceleste would run away with the game, but Portugal rallied and after 20 minutes had Ronaldo to thank for the equaliser.
Although nowhere near as integral to his team’s effort as Messi, the Real Madrid man has an undeniable eye for goal and he demonstrated it once more to level the game.
Nani did well to open up space on the left and a teasing cross was put into the box, and Ronaldo got the jump on a sluggish Sergio Romero to drive under the keeper and cancel out Argentina’s advantage.
Paulo Bento’s side had a clear game plan of squeezing their opponents across the pitch and getting bodies behind the ball, and in a tight first half it gradually paid-off. Raul Meireles in particular took pleasure in destroying the Argentine rhythm, and was lucky to avoid a booking following several over-enthusiastic challenges.
Argentina on the other hand showed their usual Jekyll and Hyde mentality, combining stunning play going forward with careless passages in their own half. Gabriel Milito and Javier Mascherano in particular were guilty of giving away possession, but the entire team were caught far too many times with the ball in dangerous positions.
Once the ball reached the final third however, Messi and Co. looked constantly threatening, and Lavezzi’s miss in the area after great work from Marcos Rojo showed a less than impeccable Portugal defence they needed to close the gaps as the whistle went for half time.
The Argentine defence suffered a big scare in the opening seconds of the second period, when Ronaldo’s cross found an unmarked Hugo Almeida and the centre forward clipped the bar with a powerful header.
The physical No.9 started the half like a man possessed, and once more rattled Romero’s bar with a header just minutes later and Ronaldo could have done more to keep the rebound down. A rattled Argentina struggled to assert themselves in the face of fierce tackling; Meireles again escaped sanction for a crunching late challenge on Cambiasso.
The fouls however ran their own risk, and Messi forced a great save from Eduardo from a dangerous free-kick just outside the area. The game was now running at a pulsating pace, and just minutes later Almeida missed an incredible chance from inches out, before the entire Portugal team clamoured for a non-existent foul in the build up.
The hour mark saw Ronaldo withdrawn to a rousing ovation from the Portuguese contingent in Geneva, while Zanetti and Banega made way the Argentines.
The change saw the Europeans lose some of their potency on the break and Argentina subsequently dared to push forward a little more, but Bruno Alves and Rolando stayed resolute in the centre and Batista's men continued to be squeezed with the ball at feet.
After a quiet spell, debutant Rojo had a golden chance to break the deadlock, but with 15 minutes left the Spartak Moscow player nodded a free header wide left to his obvious anguish.
Substitute Javier Pastore was the next man to go close, but after patient build up play the Palermo playmaker could not beat Eduardo one on one, and the scoreline remained 1-1 as the game moved into its final stages.
Argentina had by far the best of the closing exchanges, and a towering header from Pastore could not have been closer to a winner as it rebounded off the bar.
With just seconds left on the clock, Velez Sarsfield striker Juan Manuel Martinez was taken down by Fabio Coentrao in the box, and the referee had no choice but to award a penalty.
Who else to step up but Messi to calmly send the keeper the wrong way to seal a hard-fought victory, in a game which on balance the Argentines deserved to win.