Having been stretched to three sets in his opening three matches this week, Nadal finally put in a complete performance with a 6-2, 6-2 win over Grigor Dimitrov in the semifinals on Saturday.
"Today was a good confirmation that I really played better. ... A lot of positive things," Nadal said. "(Djokovic) is playing great and it's going to be a really tough match."
Earlier, Djokovic took his time before figuring out Milos Raonic's massive serve for a 6-7 (5), 7-6 (4), 6-3 victory.
Nadal holds a 22-18 career edge vs. Djokovic, but the Serb won their last meeting for the Sony Open title in March in Key Biscayne, Florida.
Nadal already has a record seven titles in Rome, while Djokovic is seeking his third championship at the Foro Italico. They have met in three finals here, with Nadal winning two of them.
Djokovic played a highly tactical match in order to defeat Raonic, the eighth-seeded Canadian who fired 16 aces with a serve that was clocked at over 140 mph.
"I can't recall the last time when I was feeling so helpless in the return games," Djokovic said. "It was brutal."
Afterward, Djokovic appealed for help for his flood-hit native Serbia, and wrote a message of support on a camera lens, adding "I love you" in Cyrillic.
"This is a total catastrophe of biblical proportions," he said. "Half the country is in danger of not having electricity."
Information from The Associated Press was used in this report.