Isner, who reached the clay final in Belgrade last weekend, held his own against the second-seeded Spaniard before losing his serve in the 11th game of the first set, during which he received treatment to his arm.

Nadal served out for the set and broke the American early in the second before holding his service for victory.

Nadal came into the Madrid Masters on the back of tournament wins in Monte Carlo and Rome. The 2005 champion and 2009 finalist hopes to extend the record for Masters titles of 17 he shares with Andre Agassi.

Earlier, Fernando Verdasco's 7-5, 6-3 third-round loss to Jurgen Melzer of Austria left only three of the top six seeds in the tournament.

With the center court's retractable roof closed due to rain, the sixth-seeded Verdasco looked well below his best and had treatment on his right foot after the first set.

Melzer broke early in the second set before Verdasco broke back for 3-3. Melzer took the next three games to clinch victory over Verdasco for the second time in seven attempts and reach his fifth quarterfinal this season.

The Austrian player will next play Nicolas Almagro of Spain, ensuring there will be at least one unseeded player in the semifinals. Almagro beat Juan Monaco of Argentina 6-4, 6-1.

In the women's third round, eighth-seeded Samantha Stosur of Australia beat Patty Schnyder of Switzerland 7-6 (3), 6-2 to set up a quarterfinal with Venus Williams.

"It's Venus so you have to expect a good match," Stosur said. "Clay probably isn't her favorite surface. We've played a few times and I've never been able to win so it's one of those times when I have to go out there and give it my best shot." Li Na of China beat Alona Bondarenko of Ukraine 6-3, 6-4 and Shahar Peer of Israel defeated Arantxa Parra Santonja of Spain 7-5, 6-2.