Champion Djokovic dropped just one game as he demolished Spain's Pablo Carreno Busta 6-0 6-1 to continue his title defence in the principality.
There was a shock of sorts as Guillermo Garcia-Lopez beat fifth seed Tomas Berdych 4-6 6-3 6-1. The Spaniard will next face defending champion and second seed Djokovic.
Spaniard Nadal, whose eight-year reign as champion was ended by Djokovic in the final last year, extended his proud record in Monte Carlo to 50-2 with the win on centre court.
The world number one will next meet compatriot and sixth seed David Ferrer in the final eight, who made easy work of Bulgaria's Grigor Dimitrov by winning 6-4 6-2.
"That is going to be a very tough match," the eight-times French Open champion told a news conference about the all-Spanish duel with Ferrer.
"David is a tough, tough player on any surface but here on clay, (he is) always a big challenge. I play a lot of matches against him, very tough ones."
Federer, who has a record 17 Grand Slam titles, will face local favourite Jo-Wilfried Tsonga in a mouth-watering quarter-final after the French ninth seed shook off a mediocre start to celebrate his 29th birthday with a 5-7 6-3 6-0 victory over Italy's Fabio Fognini.
"I think Jo played the semis here last year, so he's played here well in the past," Federer told a news conference.
"I've seen Jo play different kinds of quality matches lately so I'm not quite sure how he's going to play, how aggressive, how passive.
"I have to make sure I play aggressive myself and not become too passive just because we're on clay."
Djokovic, seeded second, can look forward to a titanic semi-final showdown with Federer should they both get past their next opponents.
Swiss third seed Stanislas Wawrinka reached the quarter-finals without hitting a ball on Thursday after his third-round opponent Nicolas Almagro withdrew injured.
"I woke up this morning with a severe pain in my left foot that prevented me from even walking normally," Almagro said.
"After consulting with the doctor for a long time this morning, we decided together that it was better for me not to play today."
Australian Open champion Wawrinka advances to meet eighth seed Milos Raonic after the Canadian beat 11th-seeded Spaniard Tommy Robredo 6-4 6-3.
Guillermo Garcia-Lopez (Spain) beat 5-Tomas Berdych (Czech Republic) 4-6 6-3 6-1
2-Novak Djokovic (Serbia) beat Pablo Carreno (Spain) 6-0 6-1
4-Roger Federer (Switzerland) beat Lukas Rosol (Czech Republic) 6-4 6-1
6-David Ferrer (Spain) beat 12-Grigor Dimitrov (Bulgaria) 6-4 6-2
1-Rafa Nadal (Spain) beat Andreas Seppi (Italy) 6-1 6-3
3-Stanislas Wawrinka (Switzerland) beat 15-Nicolas Almagro (Spain) walkover
9-Jo-Wilfried Tsonga (France) beat 10-Fabio Fognini (Italy) 5-7 6-3 6-0
8-Milos Raonic (Canada) beat 11-Tommy Robredo (Spain) 6-4 6-3
- Sports & Recreation
- Andreas Seppi
- Lukas Rosol