The Chelsea midfielder snatched a thrilling win for the reigning champions in the second minute of added time after his side had trailed 2-0 in the 79th minute and looked to be crashing out.
Yasser Ibrahim gave Egypt a shock half-time lead before Lionel Messi's penalty was saved and Mostafa Zico put the Pharaohs 2-0 up in the second period after his earlier effort had been ruled out by VAR.
But Cristian Romero's header threw Argentina a lifeline and after Lionel Messi smashed home an 83rd-minute equaliser, Fernandez completed a remarkable fightback.
Argentina, who had been given a huge scare by Cape Verde in the previous round, somehow stayed on course for the 'bicampeonato', a successful defence of the World Cup they won in 2022 in Qatar.
After a scrappy opening Egypt stole into the lead with the first effort on target in the match as Ibrahim got in front of Lisandro Martinez to head home Marwan Attia's excellent cross in the 15th minute.
Egypt's shock lead looked set to be short-lived when Nicolas Tagliafico went tumbling under Haissem Hassan's clumsy challenge soon after.
But Messi's unconvincing spot-kick was comfortably saved by Egypt goalkeeper Mostafa Shobeir, who dived low to his left to palm the ball away.
Messi has now missed four of the eight penalties he has taken at World Cup finals.
Argentina pressed for an equaliser before the break, but either side of Messi's 30-yard free-kick, which clipped a post, Shobeir kept out Alexis Mac Allister's header and produced a world-class save to deny Julian Alvarez.
Egypt were forced to defend deep and in numbers after the restart, but thought they had doubled their advantage through Zico's brilliant goal in the 58th minute, only for VAR to rule it out for a foul in the build-up.
The North Africans were not to be denied a second nine minutes later though.
Another thrilling counter-attack, involving Mohamed Salah and Hassan, saw the latter's cut-back swept home by Zico in the 67th minute.
Argentina responded to the relief of their shell-shocked fans with 11 minutes left when Romero headed home Messi's cross to set up a grandstand finale.
Messi then pounced on a loose ball in the box four minutes later to slam home an equaliser – his eighth goal of the tournament and 21st at World Cups in total – which raised the Atlanta Stadium roof.
And in the second minute of time added on, Fernandez snatched victory for Argentina with a lung-busting run into the box to head Lautaro Martinez's cross into the top corner and break Egyptian hearts.
I'm so emotional," Argentina coach Lionel Scaloni said. "What a group of players."
"Four years have passed since Qatar, and we've come to enjoy another World Cup — and we want to win it again. That's what we're aiming for," Fernandez added.
But Egypt coach Hossam Hassan, who was booked for arguing there was a foul in the build-up to Argentina's winner, was furious.
"We have been treated unfairly today. We have suffered injustice," he said.
"Ordinary life, normal life is unfair, OK, but why isn't there any fairness in sports? Within football. Pressure exercised from the Argentinian side on the referee brought about this outcome.
"I'm proud of my players. But we have not received what we deserve."
7°C