The Spaniard, playing his first match since his shock second round loss to Steve Darcis at Wimbledon six weeks ago, had little trouble in brushing aside Levine in 72 minutes to reach the third round of the Masters tournament.
The match provided little information as to the fitness of Nadal, although he played with no taping on his troublesome knees.
Levine made a bright start to the match, fashioning break points in the very first game, but Nadal saved them both, the second with an ace, before going on to hold when the Canadian sent a forehand passing shot long.
But after that first game, Nadal looked entirely comfortable, breaking the Levine serve in the fourth game to extend his lead before wrapping up the set at the first attempt when his opponent hit a backhand error.
The second set was even more one-sided, Nadal breaking in the second and fourth games before completing victory with a ferocious forehand return that typified Nadal's dominant power - Levine completely unable to cope with the weight of shot from the Spaniard.
Next up for Nadal, who joined Wimbledon champion Andy Murray and Wimbledon runner-up Novak Djokovic in making winning returns to action, will be either another Canadian wildcard Frank Dancevic or Polish 15th seed Jerzy Janowicz.
Earlier Andy Murray, twice a winner at the Canadian tournament, survived a second-set lapse in concentration to beat Marcel Granollers 6-3 7-6(2).
Canadian wildcard Vasek Pospisil proved his upset of world number 20 John Isner was no fluke as he stormed to a 6-2 6-4 victory over Czech Radek Stepanek.
Pospisil, ranked 71st in the world but playing well above that lowly standing, will now face sixth seed Tomas Berdych who wobbled at times in his match against Alexandr Dolgopolov but emerged a straight sets winner.
German Tommy Haas, however, lasted just 19 minutes before he retired trailing 5-0 to Australian qualifier Marinko Matosevic.
Frenchman Bernard Paire, who overcame Swiss Stanislas Wawrinka, awaits Matosevic in the last 16.
Montreal Masters results
Alex Bogomolov Jr (Russia) beat 3-David Ferrer (Spain) 6-2 6-4
Nikolay Davydenko (Russia) beat Pablo Andujar (Spain) 6-1 4-6 6-3
11-Milos Raonic (Canada) beat Mikhail Youzhny (Russia) 6-4 6-4
15-Jerzy Janowicz (Poland) beat Frank Dancevic (Canada) 7-6(5) 3-6 6-4
Denis Istomin (Uzbekistan) beat Filip Peliwo (Canada) 6-3 3-6 6-3
4-Rafa Nadal (Spain) beat Jesse Levine (Canada) 6-2 6-0
Marinko Matosevic (Australia) beat 10-Tommy Haas (Germany) 5-0 (Haas retired)
5-Tomas Berdych (Czech Republic) beat Alexandr Dolgopolov (Ukraine) 6-3 6-4
Benoit Paire (France) beat 8-Stanislas Wawrinka (Switzerland) 6-2 7-6(2)
2-Andy Murray (Britain) beat Marcel Granollers (Spain) 6-4 7-6(2)
Ernests Gulbis (Latvia) beat 13-Fabio Fognini (Italy) 6-3 1-6 6-1
Vasek Pospisil (Canada) beat Radek Stepanek (Czech Republic) 6-2 6-4