Nadal, who will move back up to fourth in the world when the new rankings are released on Monday, has now won seven titles in nine years in the Italian capital and has also picked up six titles in eight tournaments since returning from injury in February.
Alongside titles in Sao Paulo, Acapulco, Indian Wells, Barcelona, Madrid and now Rome, Nadal has also reached the finals of Vina del Mar and Monte Carlo since he re-joined the ATP tour after seven months on the sidelines with his troublesome left knee injury.
The Mallorcan broke in the second, fourth and sixth games to race through the opening set in just 24 minutes. And he looked set to do the same in the second only for Federer to secure consecutive games in the dying stages.
But it was only a temporary blip from Nadal, who barely put a foot wrong all afternoon, and he wrapped up victory after 68 minutes with a forehand winner.for his 36th victory in 38 matches this year.
"It's a very important day, a very happy day for me after a difficult year last year," Nadal, speaking in Italian, told the crowd after the trophy presentation.
"It is really emotional for me to win a tournament with such a long history as Rome. See you next year.
"I am just enjoying the moment and valuing it more than ever because I know where we were just a few months ago. Being here a few months later with all I have achieved is really more than a dream."
Nadal, who has not always looked at his best all week - dropping sets to Ernests Gulbis and David Ferrer - made a blistering start to the match with a break in just the second game when Federer sent a forehand long.
The Spaniard then followed that up with a second break two games later, with an angled cross court forehand winner, before sealing the first set at the first attempt when Federer pulled a forehand volley wide across court.
Yet another break followed in just the second game of the second set, Nadal easily anticipating a cross court forehand volley winner from Federer and returning it with interest for a backhand passing shot winner across court.
When Federer squandered game points two games later, instead allowing Nadal to break for a fifth time with a sensational backhand passing shot winner down the line from outside the tramlines and two metres behind the baseline, it looked as though the world number three was going to be restricted to just the two games for the afternoon.
But there was still a little life left in Federer as, with Nadal serving for the title, he broke back to love before also holding with ease to put a little more pressure on the Spaniard.
It was inconceivable that Nadal would drop serve two games in a row, however, and so it proved to be; the fifth seed serving out the match to love to firmly install himself as favourite to lift an eighth French Open title in three weeks time.