The second-seeded Spaniard broke his opponent four times en route to a 6-2 6-2 victory in one hour and 20 minutes.
Nadal was joined in the last 16 by compatriot and fifth seed David Ferrer, who overcame Radek Stepanek 7-6 (7/4) 6-2 on the controversial blue clay.
Gael Monfils, seeded 12th, progressed after Russian opponent Igor Andreev retired hurt when trailing 6-3 1-0.
Another seed, Alexandr Dolgopolov was made to work much harder for his last-16 spot, coming from behind to see off Andreas Seppi 6-7 (5/7) 7-6 (7/5) 6-3.
However, eighth seed John Isner fell at the second hurdle, beaten 7-6 (7/4) 7-6 (7/3) by Croatia's Marin Cilic.
Swiss Stanislas Wawrinka needed just an hour to overcome Jurgen Melzer 6-1 6-4, and will now face top seed and defending champion Novak Djokovic.
In the women's second round, third seed Petra Kvitova saw her Madrid challenge ended by qualifier and Czech compatriot Lucie Hradecka.
Kvitova was broken five times as she fell to a 6-4 6-3 loss.
Fourth seed Agnieszka Radwanska faced no such problems on her way to a 6-0 6-1 rout of Sara Errani, while Roberta Vinci looked equally ruthless in despatching Yanina Wickmayer 6-1 6-2.
In the third round, eighth seed Na Li saw off Angelique Kerber 7-5 6-4 while Samantha Stosur, seeded fifth, was a 6-3 6-2 winner over Petra Cetkovska.
What the stars mean:
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