The tournament lost former world No. 1 Roger Federer, however, when the 16-time major tournament champion fell to Richard Gasquet.
Nadal needed 76 minutes to defeat Feliciano Lopez 6-4, 6-2 in this clay-court event. Nadal developed a virus Wednesday night and said he strongly considered withdrawing.
His match with Lopez was delayed for 20 minutes while Nadal was trying to make a decision, but he finally chose to play and eventually had little trouble advancing.
Nadal's No. 1 world ranking is on the line this week. He needs one more win in this tournament or else Djokovic could claim the No. 1 spot by capturing the event.
Djokovic, who has won six tournaments in six appearances this year, kept his streak going with a 6-4, 6-1 victory over Stanislas Wawrinka. Gasquet outlasted Federer 4-6, 7-6 (7-2), 7-6 (7-4).
Federer was defeated in the second round of this tournament in 2010.
In other third-round matches Andy Murray defeated Potito Starace 6-2, 6-3, Robin Soderling ousted Nicolas Almagro 6-2, 3-6, 6-4 and Tomas Berdych defeated Jarkko Nieminen 6-2, 6-7 (4-7), 6-2.