Earlier Andy Murray became the first British man to reach the Rome semis in the Open era after a bizarre 1-6, 6-1, 6-1 victory against Florian Mayer.
Having been totally off colour on Wednesday in a tortured three-set victory over Italian qualifier Paolo Lorenzi, Nadal proved he was back to his best against Cilic.
The big serving Croatian hit twice the number of unforced errors as Nadal in the first set with the world number one clinically taking his only two break point opportunities and securing the set with a powerful, deep forehand that Cilic couldn't return.
The second set started off going with serve until Nadal broke to love in the seventh game, Cilic's wildly long forehand on the final point indicative of the loose game he played.
And in his next service game the world number 23 plonked a forehand into net to give up match point and then hit another wide to hand Nadal the match.
Murray became the first British man since George Hughes in 1932 to get this far in Rome.
"It is important, it's nice to do well in tournaments abroad and this tournament has been around a long, long time," said Murray.
"There's a lot of history, it's always had great fields. Every year I've been here when you walk to the practice courts there's a list of winners down a wall that has a lot of great players."
The world number four was completely out of sorts in the first set but then went on to win 11 of the last 12 games as Mayer crumbled alarmingly.
Murray had never even reached the quarters here until this year but after a poor start riddled with unforced errors, he found his form on his least favourite surface, finishing with twice as many winners as his opponent.
"He's a very tricky player, I'd never played against him or even practised against him or anything," added the 23-year-old.
"After the way the first few games went I got a bit uptight because I wasn't really seeing his game well.
"I didn't put prssure on him, I was rushing a bit, coming to the net, he was moving well and hitting passing shots.
"In my previous games I was coming up (to the net) and getting success but I had to back off a bit and made the rallies longer and I had to be more patient."
The first two sets were a poor advert for serving as eight of the 14 games ended in a break.
Murray was the principal culprit in the first set as he put up feeble resistance, going down 6-1 and holding serve only once in his first five service games.
But as erratic as the Scot was in the first set, the German was just as bad in the second, in which he failed to hold serve at all.
The second opened with three breaks of serve before Murray crucially held for only the second time in the match and he accelerated away from there, closing out the set 6-1 with a backhand crosscourt winner.
Mayer had completely lost his way on serve and after Murray held at the start of the decider, the German was broken for the fifth game in a row as he netted a backhand volley on the stretch.
Having found the corners at will in the first set, Mayer was now struggling to find his range.
The world number 28 held his next service game but it was a brief reprieve as at 4-1 he was broken to love after netting a forehand and Murray served out the match.
In the women's event, Li Na of China was the first person into the semi-finals after completing a quick 6-3, 6-1 victory over Hungarian Greta Arn.
The fourth seed has made startlingly easy progress here, losing only 13 games in three matches, and she is yet to drop a set.