A double-Grand Slam winner this season, Alcaraz will be ahead of rival Jannik Sinner in the updated men's rankings on Monday thanks to his success over Musetti, which also sealed first place for the Spaniard in the Jimmy Connors Group at the season-ending tournament.
Alcaraz, who has won 70 matches so far this season, could lose his semi-final on Saturday and still finish 2025 top of the pile, even if Sinner retains his Finals title on home turf.
But the Spaniard looks in no mood to do that as he seeks his first Finals triumph, and he appears to be on course for yet another final showdown against Sinner, who qualified in first place from the Bjorn Borg Group on Wednesday.
"It means the world to me to be honest, the year number one is always a goal," said Alcaraz.
"To be honest, at the beginning of the year I saw the number one really far away, Jannik being there winning almost every tournament he plays.
"For me it means everything. The work that we put in every day during the whole season, up and downs, comebacks from the tennis side. So I'm really proud of my team and myself."
He confidently dealt with Sinner's countryman Musetti, who has now been eliminated.
A passionate crowd cheered on Musetti but it was to no avail for the world number nine, who only qualified for the Finals due to Novak Djokovic pulling out at the last minute.
Heading into the semis with Alcaraz is Alex de Minaur, who did his part to qualify with a straight-sets win against Taylor Fritz, 7-6 (7/3), 6-3 earlier on Thursday.