The top-ranked Nadal won for the 37th straight time at this clay-court event, where he has not lost since 2003. It was his 44th career title -- but first since the Japan Open -- and 19th at a Masters event.
It was his first tournament victory since October, ending a run of three consecutive defeats in title matches.
"To start the clay season like this is fantastic, but it's more fantastic to win Monte Carlo another time," Nadal said. "This is the Masters tournament where I feel more emotion when I'm playing, because here in 2003 everything starts. I played qualifiers here, won two matches, and was for the very first time in my career top 100."
Nadal won when Ferrer, seeded fourth, sent the ball into the net following a brief exchange.
"Always special emotion for this tournament. I won seven in a row," Nadal said. "Win seven times in a row [for] anyone is almost impossible. I was more tired than usual today."
Nadal has lost two consecutive Masters finals this year to second-ranked Novak Djokovic, at the Sony Ericsson and BNP Paribas Open. He was also beaten by Roger Federer at the season-ending final of the ATP World Tour Finals in November.
"It was hard to lose, especially the Miami one, so I was a little bit more defensive today," Nadal said. "To lose three in a row is tough. So I was a little bit nervous when I had a chance to win."
Guillermo Coria of Argentina is the last player to beat Nadal at Monte Carlo, in the third round in 2003. Nadal missed the 2004 tournament because of injury.
"Well, Rafa is incredible on clay. I mean, he's everywhere at the same time," Ferrer said through a translator. "He's the best player on clay in history."
Nadal also extended his Open era record for consecutive titles at a single tournament, having set the mark when he won for the sixth time last year.
He did not drop a set last year, but Andy Murray took one off him in Saturday's semifinal that lasted nearly three hours. The win against Ferrer went 2 hours, 17 minutes.
"These kind of matches like yesterday, like today improves your condition, physical and mental," Nadal said.
Nadal also beat Ferrer in last year's Rome Masters final. Ferrer missed a key point in the 10th game when he fluffed a routine overhead smash that would have put Nadal 15-30 down on his own serve, and then was long on a forehand on the following point.
"I was lucky a bit, mistake of the smash at 15-all -- it was an important point," Nadal said. "After that David had few more mistakes. That helped me finish the match."
Ferrer, who was aiming for his third title this year and 12th overall, rued some careless errors late in the match.
"Generally speaking I'm very happy. I'm happy with my game also," Ferrer said. "I was a bit sad about certain moments."
Nadal held and then broke Ferrer for the fourth time. Ferrer saved one match point when his return clipped the net and bounced just out of Nadal's reach. But a blistering forehand gave Nadal a second chance to win, and he sealed the victory when Ferrer returned a volley into the net.
Nadal won every match he played on clay last season and took the French Open for a fifth time.
"Well, he's not a machine. He can lose," Ferrer said. "Maybe if Rafa has an injury, I will have a chance."