Federer, chasing a sixth title on his home court, defeated Luxembourg's Gilles Muller 6-2, 6-1 in the first round, pounding down a ninth ace for three match points and converting on the first to wrap up a flawless performance in 46 minutes.
The Swiss now stands 52-9 at the stadium where he got his start in the game as a ballboy two decades ago.
He has played the last eight Basel finals and appeared in the title match on ten of 15 occasions.
Second seed Nadal shrugged off his impending date with appendix surgery by routing outclassed Pierre-Hugues Herbert of France 6-1, 6-1 to reach the quarterfinals.
Federer was glad to have saved his energy as he heads into what could be a blockbuster end of season comprising next week's Paris Masters, the World Tour Finals, a Davis Cup final against France and a shot at taking back the number one ranking from Novak Djokovic.
"I didn't feel like it would go fast, I thought it would be tough," said Federer of his lightning victory.
"I didn't have an early read on his serve, had a few tough service games, and put myself under some pressure," he said.
It was "great not to have wasted any energy," Federer said.
"I have a lot of tennis to play in the next few weeks," he said.
"I felt the first match (in his title victory at Shanghai) for several days in my body.
"Now I can relax and and attack again tomorrow (against Uzbek Denis Istomin)."