Tennis: The Spaniard absorbed everything the 19-year-old Murray, seeded 15th, threw at him in a pulsating clash on Rod Laver Arena that finished after nearly four hours just before 2am local time.
The first set went with serve to a tiebreak, Murray standing up to his left-handed opponent's bludgeoning groundstrokes and trying to disrupt his rhythm with deft drop shots.
The Scot wobbled slightly when he served at 5-6 but he dug himself out of trouble and made an early break on Nadal's serve in the tiebreak.
Two unforced errors by the Spaniard gave Murray three set points at 6-3 and Nadal hit a groundstroke just over the baseline to surrender the set.
Both players had chances to break in the opening games of the second set and Murray took his opportunity, fighting back from 15-40 down to carve out a 3-1 lead. Neither player was able to dominate his service games and Nadal broke back to 3-4 when Murray sent a backhand long.
The world number two started to dictate the match and Murray struggled, netting a couple of routine returns as the pressure on him grew and handing Nadal another break with a double fault.
Nadal served out confidently to level the match and broke Murray again at the start of the third set when he double-faulted. Murray raised his game to break back to 3-3, battled from 15-40 down to hold for 5-4 and stunned Nadal with a sequence of heavy groundstrokes to take advantage of his second break point and clinch the set.
Murray then wasted five break points to allow Nadal to hold for 2-2 in the fourth and the Spaniard made him pay by breaking twice to seal the set.
Nadal made the first break in the final set and although Murray refused to lie down he wilted as the Spaniard turned on the power before sealing victory with a backhand down the line.
The 20-year-old Nadal stumbled after completing the shot and ended up lying face down on the court before the two players embraced warmly at the net.