The Swiss great put on a master class throughout the hour-long match, moving gracefully, effortlessly knocking off winners from all parts of the court and leaving Nadal little option but to scramble from side to side and hope for his opponent's level to drop.
That never happened.
Despite the lopsided score line, the crowd at London's O2 Arena was treated to another display of sweet-swinging baseline hitting, well-timed forays to the net and laser-like precision from two players who have combined for a staggering 26 Grand Slam titles.
But Federer - who accounts for 16 of that total, an all-time record in men's tennis - provided the lion's share of the highlights.
Just about the only slip-up for the Swiss came at the start of the match, when he double-faulted on the very first point before recovering to win the game.
After that, he was ruthlessly efficient on his service games, winning a whopping 85 percent of his first-serve points and 69 percent of his second-serve points for the match and not facing a single break point.
The two stayed on serve for the first five games of the first set, but Federer then began dominating the baseline rallies to break Nadal at love and the rout was on.
The world No. 2 managed to fight off another break point in his next service game and hold to 3-5 but that would be his last bright spot of the evening as Federer, who barely moved more than a meter behind the baseline the whole match, blasted forehand winners past the Spaniard at will.
Nadal's movement also was labored compared to that of the world No. 4, who easily tracked down his opponent's ground strokes and struck 28 winners to just four for the Spaniard.
"It was a great match for me basically from start to finish," Federer said in the post-match press conference.
"I was able to do what I was hoping to do: dominate from the baseline, play close to the baseline, serve well, take his time away. (It) hasn't always worked (in the past)," alluding to a career head-to-head that still favors the Spaniard by a count of 17-9.
With the victory, Federer now has won all four matches between the two players on indoor hard court, all of which have come at this year-end event.
The 30-year-old Swiss also advanced to Saturday's semifinals and remains on course for a record sixth title at this event.
Nadal, who had eked out a win in his opening round-robin match Sunday over American Mardy Fish despite suffering from an upset stomach, said he felt "perfect" physically and that Federer's play simply was too strong on the day.
"Today he played too good for me, and that's what happened," Nadal said. "Just accept that."
Despite the crushing result, Nadal refused to let the defeat demoralize him and said he was already looking ahead to his next opponent, France's Jo-Wilfried Tsonga, who also has a 1-1 record after defeating Fish earlier Tuesday 7-6 (7-4), 6-1.
The winner of that final Group B contest for both players, set for Thursday, will advance to the semifinals.
"It's not the moment to say goodbye," Nadal said. "It's the moment to keep fighting. I'm still in the tournament."
On Wednesday, the other Spanish player in this elite, eight-man, field, David Ferrer, will take on world No. 1 Novak Djokovic of Serbia, both of whom won their opening Group A round-robin matches on Monday.
The Barclays ATP World Tour Finals is regarded as the fifth-most prestigious tournament on the men's tennis calendar after the four Grand Slams.