The second-ranked Djokovic has beaten Nadal in all four finals they've played this year and defeated the Spaniard for the first time on clay in last week's Madrid Open final.
Djokovic has now become the first player to beat Nadal on clay twice in the same year, a feat that comes exactly a week before the French Open starts.
Djokovic's edge over Nadal could enable him to overtake his rival for the No. 1 ranking the week after Roland Garros.
Djokovic's streak this year trails only John McEnroe's 42-0 start in 1984. Overall, Djokovic has won 39 consecutive matches stretching back to Serbia's Davis Cup triumph in December, sixth best in the Open era, seven behind Guillermo Vilas' record set in 1977.
Earlier, Maria Sharapova stormed to a 6-2, 6-4 win over Sam Stosur in the woman's final for the biggest clay-court title of her career.
After a three-hour rain delay, the seventh-seeded Sharapova won the opening four games, then cruised from there to follow up her victory over top-ranked Caroline Wozniacki in the semifinals.
Sharapova is a three-time Grand Slam winner and Roland Garros remains the only major title she hasn't won. She'll now be among the favorites in Paris.
"This is just the beginning of many things to come. This is just the start of everything," Sharapova said during the trophy presentation.
Djokovic attributed his win in Madrid partly to the altitude and faster conditions there. The conditions at the Foro Italico are more similar to those in Paris, perhaps making this victory more meaningful.
Djokovic also had to recover from a three-hour semifinal win over Andy Murray that ended near midnight Saturday.
Fortunately for Djokovic, the rain delay before the woman's final gave him more time to rest.
Despite the delay, nearly all of the 10,500 ticket holders were on hand for the Djokovic-Nadal match, and with Italy located geographically in between Spain and Serbia both players received about equal support.
Djokovic broke to take a 5-3 lead in the opening set when Nadal shanked a backhand long off his racket frame but Nadal broke right back in the next game.
With Nadal serving at 4-5 he made three baseline errors to give Djokovic his first set point, which Djokovic won by taking advantage of a Nadal backhand that sat up high inside the court, setting up a backhand cross-court winner for Djokovic.
While Nadal was using more loopy topspin shots to keep the ball in the court, Djokovic flattened his shots out more often, skimming balls just over the top of the net.
After trading breaks early in the second set, Djokovic began screaming to himself and pumping himself up after each winner as the match drew closer to the end. He also had to stretch his aching muscles in between points.
With rain drops beginning to fall again, Djokovic closed the match out with another break after a Nadal netcord put him in control, then fell to the clay on his back.
Stosur hadn't reached a final since losing to Francesca Schiavone at Roland Garros last year and the Australian is now 0-8 in her career against Sharapova.
"It was a great week for me," said Stosur, who beat Schiavone in the quarterfinals. "Well done to Maria today, well played." A former No. 1, Sharapova had been struggling to regain her best form ever since undergoing right shoulder surgery in October, 2008 _ which caused her to miss 10 months of action.
The Russian won her last title in Strasbourg, France, a year ago.
With her fiancee and New Jersey Nets guard Sasha Vujacic watching from the stands, Sharapova didn't drop a set all week, and she required just 1 hour, 23 minutes to beat Stosur.
Short link: