In Saturday's semifinals at the Foro Italico, Federer held off a stiff challenge from rising Frenchman Benoit Paire 7-6 (5), 6-4, and six-time Rome champion Nadal defeated sixth-seeded Tomas Berdych 6-2, 6-4 — a day after Berdych rallied to beat top-ranked Novak Djokovic.
It will mark Nadal's eighth consecutive final since his return earlier this year from a seven-month layoff due to a left knee injury. As for Federer, who recently returned from a seven-week break from the circuit, it will be his first final of the year.
"It's nice to have these revival moments for both of us," Federer said. "I'm sure we're both looking forward to it. I clearly am. I hope it's the same for him."
In the women's event, top-ranked Serena Williams moved within one victory of winning her fourth consecutive title this year. She'll face third-seeded Victoria Azarenka in the final.
Williams overcame an early break of her serve to ease past Romanian qualifier Simona Halep 6-3, 6-0 and extend her career-best winning run to 23 matches. Azarenka kept her concentration through two rain delays to beat seventh-seeded Sara Errani 6-0, 7-5.
Williams is coming off consecutive titles in Miami; Charleston, South Carolina; and Madrid last week.
The men's final will mark the 30th meeting between Federer and Nadal and it will be a rematch of the 2006 Rome final that Nadal won in a fifth-set tiebreaker. These days, Masters series' finals are best-of-three sets.
"We're still similar tennis players but a lot of time has gone by," Federer said. "But I think we still enjoy tennis as much as back then, maybe even more."
The 17-time Grand Slam winner recounted how the 2006 final made him believe he could compete with Nadal even on clay.
"I thought, 'If I can hang with him in Rome for 5 hours on clay, which is supposed to be his best surface, I can do it anywhere,'" Federer said.
Nadal holds a 19-10 edge head to head against Federer but they have split their last four meetings.
"We are here in 2013 and he is No. (3) in the world and I am No. 5 after not playing months and we are still playing good and I hope that this is not going to be the last time," Nadal said of the rivalry.
Federer overcame a break of his serve midway through the first set against the 36th-ranked Paire, who was playing his first Masters series semifinal. The set was decided by just a few points in the tiebreaker, which Federer closed out with an overhead smash.
Federer then went ahead with an early break in the second set and stayed in front from there.
"He's got a really good first serve, moves well, also makes you feel somewhat uncomfortable — he's got many assets," Federer said. "Clearly the tiebreaker could have gone either way. ... It was a tough match. I'm happy to come out in straight sets."
Nadal broke in the opening game of his match and immediately took control.
After being pushed to three sets in his previous two matches, against Latvian qualifier Ernests Gulbis and fourth-seeded David Ferrer, Nadal appeared back in his comfort zone against Berdych.
"The first set was fantastic," Nadal said. "I think I played one of the best matches since I'm back."
Williams' only title at this clay-court event came in 2002, when she beat Justine Henin in the final. That was also the year she won her only French Open title. Last year in Paris, Williams lost in the opening round of a major for the first time, falling to 111th-ranked Virginie Razzano of France.
"I love the clay. I haven't had many wins at Roland Garros but I do love it. I love to slide," Williams said. "My goal is just to win a match there this year."
Williams had twice won 21 matches in a row before, although both of those runs came more than a decade ago, in 2002 and the beginning of 2003.
Martina Navratilova established the longest women's win run in the Open Era at 74 matches in 1984.
At 31, Williams is back at the top of her game after missing 11 months in 2010 and 2011 with a right foot injury and a pulmonary embolism.
The 64th-ranked Halep entered with an impressive run herself, having beaten former top-10 player Daniela Hantuchova to qualify and then ousting 2009 French Open champion Svetlana Kuznetsova in the first round. That was followed with wins over fourth-seeded Agnieszka Radwanksa, 13th-seeded Roberta Vinci and two-time Rome winner Jelena Jankovic.
Halep broke to take a 2-1 lead in the first set, but Williams broke right back and cruised from there as she gained the measure of her opponent and began to win the longer rallies.
Williams went directly to the practice court after winning.
"I was unhappy with some things today," she said. "I want to do well here as well as (in Paris)."
It's Azarenka's first final since beating Williams for the title in February at Doha, Qatar. That followed her Australian Open victory. Since then, Azarenka has been slowed by right ankle and left foot injuries.