Nadal improved to 15-0 on clay this season and won a record 18th Masters title Sunday, beating top-ranked Roger Federer 6-4, 7-6 (5) in the Madrid final.
Nadal, who will return to No. 2 in Monday's rankings, dodged questions about being the favorite at the French Open starting May 23.
"I'm very happy with everything so far this year. I think I've returned to my top form and that's the most important thing for me," Nadal said. "Am I favorite to win at Roland Garros? I was last year and I lost."
Nadal, hampered by nagging knee injuries last season, reversed the result of the 2009 final — the last time he and Federer faced each other — to win in Madrid for a second time and move one Masters title ahead of Andre Agassi and two in front of Federer.
"The most important thing is winning at home; winning in Madrid is a dream. After that, I think about the ranking," said Nadal. "Against this opponent, it's always going to be difficult."
In the women's final, Venus Williams was beaten 6-2, 7-5 by unseeded Aravane Rezai of France.
Nadal also won titles in Monte Carlo and Rome to become the first player to win all three titles in the same season. He has lost only two sets during that run and is 14-7 all-time against Federer, including 10-2 on clay.
"I wasn't able to defend my title here today but I thought Rafa played an incredible clay-court season," said Federer. "I'm looking forward to Paris now. I'm happy with my clay-court game."
Both players struggled to hold serve early on — Nadal broke on his third attempt to go up 2-1 before the Swiss player broke back.
Nadal, who won in Madrid in 2005, went up 4-3 when Federer sent a backhand into the net after saving four break points.
Federer should have broken in the next game when Nadal's double-fault took the score to 15-40. Solid serving from the Spaniard kept him in that game and he punched the air in celebration as he went on to take the set with a perfectly judged crosscourt forehand.
With Federer's forehand misfiring, he hit the net to lose serve at the start of the second set before breaking back immediately.
A crosscourt backhand on the run gave Nadal another opportunity to break at 2-2 and he took it with a passing shot down the line.
Serving at 4-3, Nadal slipped over when retrieving a shot and Federer slotted the ball away for 0-30. The Swiss created a break chance with an audacious drop shot and broke to stay in the match when Nadal hit the ball long.
Nadal brought the Manolo Santana Stadium to its feet when he held serve for 5-5 by ending a fierce baseline rally with a crosscourt dropshot.
In the tiebreaker, a Federer backhand into the net gave Nadal two match points on his own serve and the Swiss saved the first with a stinging forehand winner before mis-hitting on the second to hand his rival the title.
"It's nice that we have had a chance to play each other again and live up to the expectations with a good match, and it was a nice performance from both of us," Federer said. "He comes up with incredible stuff. He's Rafa Nadal after all."
Rezai rallied from two breaks down in the second set to win her third career title in her sixth final.
The fourth-seeded Williams was seeking to win a 10th clay-court title and improve on her 12-1 record on the surface this year. It was the 70th final of her career, and she will rise to No. 2 in the rankings on Monday for the first time since May 2003.
"I probably wasn't at the highest of my energy today. I felt a little slower than normal, but I tried hard and I feel very good about my game," Williams said. "Sometimes you run into a player who's red hot; they hit every shot, they don't miss — and credit to them."