Spaniard Nadal, twice champion at Indian Wells, was gifted his spot when Argentina's Leonardo Mayer withdrew with a back injury before the start of their third-round match.
Federer, a four-times winner of the ATP Masters 1000 event, had minor back problems of his own but progressed with a commanding 6-3 6-1 victory over Croatia's Ivan Dodig in a contest lasting just 61 minutes.
Federer and Nadal last met a year ago, also at Indian Wells, when the Swiss won a semi-final battle 6-3 6-4.
Federer tweaked his back during the latter stages of his match against Dodig, but with a rest day on Tuesday he was not worried that it could affect his last 16 match on Wednesday.
"It's not the first time it's happened in my career, so, I know how to deal with it," said the world number two.
Federer will next meet compatriot Stanislas Wawrinka, who beat Australian veteran Lleyton Hewitt 6-4 7-5 in an evening match at the Indian Wells Tennis Garden.
"I'm walking fine, I have a day off tomorrow. Everything is all right," added Federer. "It's happened during Grand Slams, during tournaments, in practice.
"It's just something you learn to deal with. And as long as I keep on playing, it's all right. I also know I have a longer break to recover so, from that standpoint, I'm not worried at all."
World number five Nadal, who is competing in his first tournament on a hardcourt surface in almost a year, was saddened when he learned that Mayer had withdrawn.
"That's bad news, for sure, for the fans and for Mayer, especially," said the Spaniard, who will next face Latvian Ernests Gulbis. "I talked with him. It seemed like it's nothing very, very bad.
"Just a typical back problem, beginning when he was warming up his serve. The physio says maybe in four days, five days he will be ready.
"That's the most important thing, that nothing is serious," said the Spaniard, who was sidelined for seven months last year by a left knee injury.
Though Nadal has beaten Gulbis in their four previous meetings, the Latvian looked forward to challenging the Spaniard after winning his 13th consecutive match on Monday.
"When was the last time I won 13 matches in a row?" 67th-ranked Gulbis said after fighting back to beat Italy's Andreas Seppi 5-7 6-3 6-4.
"Of course he's a great player, but I honestly believe that if I play my best game I can beat him.
"I like to play against him because his ball and his heavy spin, it's good for my timing. I don't like it when the opponents hit flat, deep balls."
Second-seeded Federer, the defending champion at Indian Wells, improved his win-loss record this year to 12-3 after overcoming Dodig in their first meeting.
Dodig gave the Swiss a tough challenge early on and the opening set went with serve until the eighth game when the Croatian made two consecutive double faults to be broken.
Federer then needed four set points to serve out, finally clinching the set in 34 minutes with a service winner that left his opponent floundering.
The Swiss maestro then took firm control, breaking Dodig in the first game, when the Croatian netted a backhand, and also in the third, when his opponent again double faulted.
Federer sealed victory by breaking Dodig for a third time, the match ending on yet another double by the 60th-ranked Croatian.
In other matches, sixth-seeded Czech Tomas Berdych eased past Germany's Florian Mayer 6-4 6-1 while 10th-seeded Frenchman Richard Gasquet swept aside Poland's Jerzy Janowicz 6-1 6-4.
BNP Paribas Open results
18-Stanislas Wawrinka (Switzerland) beat Lleyton Hewitt (Australia) 6-4 7-5
13-Gilles Simon (France) beat Benoit Paire (France) 3-6 7-6(5) 6-4
2-Roger Federer (Switzerland) beat Ivan Dodig (Croatia) 6-3 6-1
10-Richard Gasquet (France) beat 24-Jerzy Janowicz (Poland) 6-1 6-4
6-Tomas Berdych (Czech Republic) beat 27-Florian Mayer (Germany) 6-4 6-1
Ernests Gulbis (Latvia) beat 20-Andreas Seppi (Italy) 5-7 6-3 6-4
5-Rafa Nadal (Spain) beat Leonardo Mayer (Argentina)WO
Kevin Anderson (South Africa) beat Jarkko Nieminen (Finland) 6-3 6-1
- Sports & Recreation
- Leonardo Mayer
- Ivan Dodig