It was world number one and top seed Djokovic's first win over Nadal in seven meetings in Paris, avenging his defeats in the 2012 and 2014 finals.
It also eased Djokovic, who fired 45 winners to Nadal's 16, closer to a first French Open title and the completion of a career Grand Slam.
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For Nadal, it was a sobering way to mark his 29th birthday with the comprehensive loss placing a serious question mark over whether he will be able to achieve his dream of a 10th French Open crown.
The defeat, just his second in Paris in a decade after a fourth-round exit to Robin Soderling in 2009, will probably also see him slip out of the world top 10 for the first time since 2005.
In a marathon 67-minute first set in their 44th career meeting, Djokovic raced into a 4-0 lead, allowing Nadal just four points.
But the nine-time champion roared back to 4-4, finally finding his range with his trusty forehand.
Nadal faced down three set points in the 10th game, also shrugging off a time warning from umpire Cedric Mourier for exceeding the 20-second limit between points.
After a 12-minute game, Nadal held for 5-5 and saved two more set points in the 12th game before Djokovic sealed it with a low, searing cross-courter which Nadal could only scramble towards in a desperate attempt to reach it, succeeding in only pushing the ball wide.
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