Michelle Coleman missed the final and had the 12th time.
Sjöström improved her time from the trials, where she was the fastest, by 12 hundredths to 52.87.
In her semifinal, four swimmers were lined up like a string of pearls at the finish.
Sjöström came third, 12 hundredths behind gold favorite Mollie O'Callaghan, Australia, who won the heat.
In the first semifinal, Siobhan Haughey, Hong Kong, recorded the fastest time with 52.64.
Everything suggests a thrilling race on Wednesday evening at 20.30.
Sarah Sjöström, 30, was the oldest in the semifinal field and thinks she can take advantage of her experience.
When you start to push yourself in an Olympic Games final, maybe they get lactic acid, I might be able to get through it in a different way since I've swum so many Olympic Games and World Championship finals. Maybe that's my advantage, says Sjöström.
"A bit risky"
She experimented in the semifinal by changing her breathing pattern.
I had a few points I worked on, I breathed a little less on the first length than I usually do. It worked well, she says.
Sjöström had initially not planned to swim the 100 meters freestyle in the Olympic Games, only focusing on the half distance individually. There, she is a big gold favorite.
Now she's doing her first championship swim on 100 meters freestyle in two years.
I'm not a huge 100-meter swimmer anymore, so I'm trying to find my thing. It's a bit risky to test things at an Olympic Games, but I have no other choice, she says.
Miss for Coleman and Persson
Michelle Coleman would have needed to beat her five-year-old personal record (53.04) to reach the final.
Now she recorded 53.75 and was 57 hundredths behind the eighth and final time.
I'm going out and really giving it my all. That's what I'm proud of. The first 50 is super good, the start is great. I would have liked to swim the final, but I did everything I could, says Coleman, who also swims 50 meters freestyle in the Olympic Games.
A disappointed Erik Persson, European Champion in June, missed the final on 200 meters breaststroke.
His 2.10,11 was 22 hundredths from the final.
It's a big disappointment, it feels like I could have cut more time from this morning. It feels heavy, says the 30-year-old, Olympic Games finalist in Tokyo, who is still focusing ahead.
It's just back to the drawing board, he says.
The final field in time order from the semifinal:
Siobhan Haughey, Hong Kong, 26 years, 52.64.
Shayna Jack, Australia, 25 years, 52.72.
Mollie O'Callaghan, Australia, 20 years, 52.75.
Yang Junxuan, China, 22 years, 52.81.
Marrit Steenbergen, Netherlands, 24 years, 52.86.
Sarah Sjöström, Sweden, 30 years, 52.87.
Torri Huske, USA, 21 years, 52.99.
Gretchen Walsh, USA, 21 years, 53.18.
