Novak Djokovic has won the event three years in a row, but he was listed second behind Nadal.
Nadal won two majors in 2013 after missing the Australian Open with a knee injury. He won in Melbourne in 2009 and will open this year's event with a match against Bernard Tomic. Djokovic will face Lukas Lacko to start the tournament, which gets under way Monday.
Williams won the French Open and U.S. Open last year to bring her major title total to 17.
The remainder of the Top 10 among the women's seeds will be Victoria Azarenka, Maria Sharapova, Li Na, Agnieszka Radwanska, Petra Kvitova, Sara Errani, Jelena Jankovic, Angelique Kerber and Caroline Wozniacki.