The eight-player, £250,000 tournament began at the Motorpoint Arena as the stars completed their first two of three group matches on Saturday as the PDC's first BBC-televised tournament began in style.
Taylor was the day's outstanding performer, as he firstly averaged almost 103 and hit three ton-plus finishes in a 10-5 defeat of Peter Wright before bettering that as he overcame van Gerwen 10-4.
Van Gerwen had won six successive tournaments heading to Cardiff and extended his unbeaten run to 36 matches with a 10-5 win over Robert Thornton in their opener, but paid the price for missed doubles when he took on a clinical and ruthless Taylor.
Taylor showed his intent with a superb 167 checkout in the game's third leg, and after van Gerwen took out 122 in reply, further finishes of 101, 138 and 120 helped the 16-time World Champion to book his semi-final spot.
Taylor said: "I'm over the moon with how it's gone today. In my mind I'm not seeing it that I'm through, and I'll just concentrate on playing Robert and trying to win.
"I've had a break and my finishing is a bit better, my scoring is a little bit better and that's a combination for winning tournaments, so I'm happy.
"Michael let me off a couple of times but I kept putting him under pressure and you've got to do that against him. It's lovely to be a part of this event. The crowd are wonderful and it's lovely to see them enjoying themselves."
Van Gerwen now faces a showdown with Peter Wright on Sunday afternoon to decide the other player to progress from Group A, after the world number five bounced back from his loss to Taylor with a 10-6 defeat of Robert Thornton.
Pre-tournament favourite van Gerwen uncharacteristically failed to hold throw in seven attempts against Taylor, and said: "Fair play to Phil because he had some good finishing but I didn't really turn up.
"I didn't play well, I missed doubles and wasn't focused enough and it wasn't my day, but tomorrow we have another day. I'm still in the tournament and it's in my own hands - tomorrow is a knockout."
Wright said: "I'm pleased to have got past Robert because he didn't hit his doubles and I punished him. Every day's different and it should be a good game against Michael, he brings out the best in everybody."
World Champion Gary Anderson put one foot into the last four by winning both of his Group B clashes, overcoming Michael Smith 10-5 before seeing off James Wade 10-7.
Anderson had enjoyed a three-week break ahead of the Cardiff event, and said: "To win both matches is a good start to the event because I've been a bit rusty.
"I made a mess of a few legs in both games and I could have wrapped up the win against James a bit sooner, but I got the job done. My scoring is coming and the finishing was good, so I've got no worries going into Sunday."
Wade had earlier opened the day by reeling off seven successive legs in a 10-3 win over Adrian Lewis, who later edged out Smith 10-8 in their evening contest.
"I wasn't good enough against Gary and I'm disappointed, but I've got to put it behind me," said Wade. "I know I'm good enough but talk is cheap, and hopefully the right James Wade can come out tomorrow."
The results now mean that Lewis needs to defeat Anderson in their repeat of the World Championship final to progress to the last four, while both Wade and Smith could still secure semi-final places.
Lewis, though, was happy to have bounced back from his opening defeat as he saw off Smith, and said: "I went away and dusted myself off and I've given myself a lifeline now.
"I struggled to get over the line against Michael but in patches it was good. Gary beat me in the World Championship final and I'll be aiming for revenge!"
The Unibet Champions League of Darts concludes on Sunday, with the afternoon session's final group games followed in the evening session with the semi-finals and final.
A limited number of tickets are still available from the Motorpoint Arena Box Office, either in person or by calling 02920 22 44 88.
Unibet Champions League of Darts
Saturday September 24
First Group Matches
Gary Anderson 10-5 Michael Smith (B)
Adrian Lewis 3-10 James Wade (B)
Phil Taylor 10-5 Peter Wright (A)
Michael van Gerwen 10-5 Robert Thornton (A)
Second Group Matches
Adrian Lewis 10-8 Michael Smith (B)
Gary Anderson 10-7 James Wade (B)
Michael van Gerwen 4-10 Phil Taylor (A)
Peter Wright 10-6 Robert Thornton (A)
Sunday September 25
Final Group Matches
James Wade v Michael Smith (B)
Gary Anderson v Adrian Lewis (B)
Phil Taylor v Robert Thornton (A)
Michael van Gerwen v Peter Wright (A)
Live on BBC2 from 1pm
Winner Group A v Runner-Up Group B
Winner Group B v Runner-Up Group A
Order of Games TBC
Live on BBC2 from 6.30pm
Group Matches - Best of 19 legs
Semi-Finals & Final - Best of 21 legs