The Spaniard won for the 13th time in 17 career meetings against the Italian, who was seeking his second major quarterfinal as he hit 24 winners and broke Fognini's serve six times.
The victory sends Nadal to a last eight showdown with fifth seed Stefanos Tsitsipas, their second match in the last three years in Melbourne after their 2019 semifinal encounter.
Nadal sharp as he disposes Fognini to reach quarters
Nadal was up and running quickly, breaking in the second game of the match as Fognini netted to take a 2-0 lead. The Italian responded, firing a glorious backhand winner on break point to get back on serve at 3-2.
The Spaniard restored his advantage with an immediate break and nearly closed out the set on the 16th seed's serve as Fognini saved three set points, but serving for the set at 5-3, a booming serve gave Nadal a one-set lead.
Fognini struck first in the second set as he broke for a 4-2 lead as the second seed committed an unforced error on break point, but Nadal streaked to a two-set lead, winning the final four games of the set.
The third set was a foregone conclusion, Nadal breaking in the third game to go in front 2-1. Fognini's 35th unforced error of the match handed a second break to the Spaniard, who was now ahead 4-1 and soon after, he wrapped up the win with his sixth ace on match point.