However, the 25-year-old broke in the very next game before successfully serving out the match after two hours and 10 minutes of enthralling action.
Then the Swiss, thanks to some timely serve-volley artisty, saved the match points at 5-6 and rolled in the breaker.
"I played with better rhythm and showed some positive things", said Nadal, who missed practice time earlier in the week because of a stomach virus. They had come out in droves on a rare day on which the "big three" of Roger Federer, Rafael Nadal and Novak Djokovic were all in action. The King of Clay is [1.30] to progress, which actually looks a little on the generous side - I'd be surprised if he was ousted by the current version of Wawrinka in the evening match.
A lucky volley, followed by a smash victor, kept Federer in the match.
Federer displayed a brilliant will to win, but barely survived and perhaps proves his worries about Roland Garros this season were justified all along.
"It's also a bit about luck and I was the luckier one today".
The Frenchman continued to have the upper hand in the third jumping out to a 4-1 lead until Federer roared back.
Simona Halep is one match away from regaining the world No 1 position after she reached the women's final with a 6-2, 6-7, 6-0 victory over Switzerland's Belinda Bencic. Barcelona champion scored the fourth win over Roger in six matches, halting Roger's first run on clay since Rome 2016 after a titanic battle that kept the crowd on the edge of their seats all the time. The Madrid Open is his first clay tournament as he prepares to return to the French Open after a three-year absence. The Madrid Open is only the second event at this level since March 2017 to have Federer, 37, Nadal, 32, and Djokovic, 31, all listed in the draw.
Federer will next face fifth-seeded Dominic Thiem, who defeated Fabio Fognini 6-4, 7-5. He saved the two match points in a long game when trailing 5-6.
Nadal stayed in contention for his sixth Madrid title with a 6-3, 6-4 win over American Frances Tiafoe.
Novak Djokovic continued to play well winning his 13th straight over Jeremy Chardy with a 6-1, 7-6 (2) decision.
Stefanos Tsitsipas takes on Alexander Zverev in the battle of the young guns before five-time victor Rafael Nadal faces Stan Wawrinka in the remaining quarter-final line-up.
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