The world number two made two breaks of his own to level the unpredictable match in the Rod Laver Arena.
Nadal broke for a 2-0 lead in the decider and the 20-year-old Spaniard romped through the final set to seal victory in three hours 51 minutes to reach the Australian Open quarter-finals for the first time.
"It was a very tough match. He's a great player," said Nadal.
"It was a very important match for me. I needed to win a tough match like that against a top player. I tried to fight for every point."
Nadal will play 10th seed Fernando Gonzalez in the last eight.
Fifth seed James Blake, who won in Sydney this month, suffered his first loss of the season and crashed in straight sets to Chilean Fernando Gonzalez, who now meets the second-seeded Nadal for a spot in the semi-finals.
Germany's 12th seed Tommy Haas beat eighth seeded Argentine David Nalbandian in four sets and will face Russian Nikolay Davydenko in the quarter-finals.
|David Nalbandian didn't have enough tricks |
to defeat Tommy Haas [AFP]
With defending champion Roger Federer safely into the quarter-finals, Haas, Gonzalez, Davydenko and Nadal joined him Monday.
Gonzalez upset Blake 7-5, 6-4, 7-6 (7/4) while Haas beat Nalbandian, a semi-finalist last year, 4-6, 6-3, 6-2, 6-3.
Davydenko, who has been anonymous working his way to the last eight, qualified for his third straight Australian Open quarter-final with a 5-7, 6-4, 6-1, 7-6 (7/5) win over Czech Tomas Berdych.
Top seed Maria Sharapova also marched on, outmuscling fellow Russian Vera Zvonareva 7-5, 6-4 to set up a match with another fellow compatriot, 12th seed Anna Chakvetadze, who beat Patty Schnyder 6-4, 6-1.
Sharapova showed occasional concentration lapses and acknowledged she needed to improve against Chakvetadze, who won the lead-up Hobart International tournament.
"I thought I played a lot better today than I did in my previous rounds but I'll definitely have to step it up against her," said Sharapova, whose victory handed her the number one world ranking.
|Hingis will face Clijsters in the|
next round [AFP]
She earned the top spot after Amelie Mauresmo, the Australia Open defending champion, tumbled out in the third round and former number one Justine Henin-Hardenne missed the tournament for personal reasons.
Martina Hingis, seeded six, needed all her big-match experience to overhaul 19th seed Li Na 4-6, 6-3, 6-0, coming back to dismantle Li's game and secure a quarter-final appearance here for a ninth time.
Hingis will now play Kim Clijsters, who beat her at the same stage last year, ending the Swiss star's Grand Slam comeback after a three-year injury gap.
Clijsters has been in dazzling form and was clinical against Slovak Daniela Hantuchova, powering through 6-1, 7-5.
"I know I have to come out 100 per cent and be ready from the beginning, otherwise I'll be run over," she said of Clijsters, the fourth seed.
"That's the key. I have a day rest, and practice, sleep well, give myself the best shot."