In the 30th meeting between the tennis greats, Nadal controlled the final from the start and won 6-1, 6-3 Sunday for his seventh Italian Open title.
"Rafa was just too good today," Federer said.
It tied for the second most lop-sided win in the series since Nadal also lost just four games, but over three sets, in the 2008 French Open final against Federer. At the tour finals in London in 2011, Nadal allowed Federer just three games.
"For that to happen between two players with not that much difference, it has to be because one player plays very well and the other is having more mistakes than usual," Nadal said. "That's all."
Nadal improved to 20-10 in his career against Federer, and showed once again that he'll be the player to beat when the French Open starts next Sunday. It was the fifth-ranked Spaniard's sixth title since returning earlier this year from a seven-month layoff due to a left knee injury.
"I'm playing much better than I dreamed of a few months ago," Nadal said. "I'm doing the right things to play well."
Federer complimented Nadal for the way he took his time before returning to the circuit.
"It goes to show that's what every player should do," Federer said. "Now he's as strong as ever and is going to be the favorite for Roland Garros."
In the women's final, Serena Williams won her fourth consecutive title of the year in impressive fashion, defeating third-seeded Victoria Azarenka 6-1, 6-3. The top-ranked American will go to Paris on a career-best 24-match winning run.
Williams was coming off consecutive titles in Miami; Charleston, South Carolina; and Madrid last week.
She didn't drop a set while winning this title.
"I moved better than I did all week," Williams said. "Hopefully I can stay like this. I feel really good."
Federer hadn't previously dropped a set all week as well, but he had no reply for Nadal's topspin-heavy groundstrokes. The 17-time Grand Slam winner attempted serving and volleying, but he either missed the volley or Nadal passed him with the return.
Federer lost 10 points to nine won at the net. He also committed 32 unforced errors to Nadal's eight.
"I was missing too many easy forehands," Federer said. "And if you don't stick your volleys or serve very accurate it's very difficult."
It was 20th meeting between Nadal and Federer in a final, tying the Ivan Lendl-John McEnroe rivalry for most championship matchups in the Open era.
Center court at the Foro Italico was packed to the limit with 10,500 fans, but the crowd didn't get to see too much tennis. The men's final took only 1 hour, 9 minutes -- a far cry from the 2006 final in which Nadal beat Federer in a fifth-set tiebreaker after more than 5 hours.
Rome remains one of the few important tournaments that Federer has never won. He also lost the 2003 final to Felix Mantila.
The women's final Sunday was also a short affair.
On a pleasant spring day, Williams immediately took control by breaking Azarenka's serve twice to take a 3-0 lead in the opening set.
The 15-time Grand Slam winner slugged winners at will off Azarenka's first and second serves, stepping into the court to dictate play at every opportunity.
Azarenka grew distraught at the end of the first set, twice slamming her racket on the court in desperation.
After trading breaks midway through the second set, Williams took control again when Azarenka double-faulted to give her a 5-3 lead. Williams served out the match at love, letting out a big scream when she unleashed a backhand winner down the line to close it out.
"She definitely showed incredible tennis today," Azarenka said. "But I don't think the score says how close the match was. She was better at the key moments."
Williams held a 41-12 edge in winners and served nine aces to Azarenka's none.
"It wasn't really easy out there," Williams said. "I just came up with the good shots at the right times."
Williams has twice won 21 matches in a row before, although they came more than a decade ago, in 2002 and the beginning of 2003.
Martina Navratilova established the longest women's winning run in the Open Era at 74 matches in 1984.
Williams' only previous title at this clay-court event came when she beat Justine Henin in the 2002 final.
That was also the year she won her only Roland Garros title. Last year in Paris, Williams lost in the opening round of a major for the first time, falling to 111th-ranked Virginie Razzano of France.
"The lady in the mirror is the ultimate opponent for me," Williams said, looking ahead to Paris. "I'm going to try and win every match and be really cautious going for every point."
At 31, Williams is back at the top of her game after missing 11 months in 2010 and 2011 with a right foot injury and a pulmonary embolism.
In the women's doubles final, Su-Wei Hsieh of Taiwan and Peng Shuai of China upset the top-ranked Italian pair of Sara Errani and Roberta Vinci 4-6, 6-3, 10-8. In the men's final, top-ranked Bob and Mike Bryan of the United States beat the sixth-ranked Indian pair of Mahesh Bhupathi and Rohan Bopanna 6-2, 6-3.