The third seed lost just one point in a dominating first set which lasted 28 minutes. The 21-year-old Nishikori found some range in the second set but had no hopes against an on-form Federer at the event where he once served as a ballboy.
"It was a perfect match for me. Now I have big hopes for Paris and London," said Federer, whose eyes moistened as he held the trophy to a standing ovation from "his" crowd after ending his longest title drought since 2002.
"It's great to win at home again," said Federer. "Kei put up a good fight. I've known ever since I hit with him as a teenager that he could have a good future.
"He's had some injuries but he's playing well now. It was a good match and I'm very happy for the win."
The 30-year-old Federer now stands 29-1 at the event over the past six years after playing six straight finals. The tournament is the only non-grand slam tournament where he has won more than 40 matches.
Federer improved to 54-12 this season as he competed in his first final since losing to Rafael Nadal at Roland Garros in June.
The seed, who hit with Nishikori several seasons ago in Miami and had the Asian youngster marked for a promising future, was playing in his 98th ATP final, standing 68-30 and 2-2 in 2011.
Federer nailed five aces and broke on four of 13 chances against Nishikori, who was playing his second final of the season after Houston in the spring. The Swiss saved the only break point he faced.
Federer allowed Nishkori one game in the opening set as the newcomer put up a fight to no avail.
The veteran claimed the opener on a Nishikori double-fault and then broke for 4-2 in the second after producing his third love game. Federer concluded with a break, setting up a match point with a pass after drawing Nishikori into the net.
"I tried to fight, but Roger would not let me into the match," said Nishikori. "I'm very glad to have played the final. It's always been one of my goals to play Roger."
The challenger goes to Paris with a special exempt entry after reaching the Basel semi-finals.