The two teams are locked together at the summit of the Primera Division on 49 points with Barca holding top-spot on goal difference alone.
Diego Simeone's men have surprised many this season by splitting Spain's big two, with City rivals Real sitting five points behind the pace-setters in Carlo Ancelotti's first season in charge.
A win at the Vicente Calderon could go a long way to establishing Atletico as genuine contenders in the second half of the season and Xavi believes that Barca need to be sending a message of their own.
"The game against Atletico is vital for the outcome of the league - it might not turn out to be definitive, but a win would lay down a marker," he told www.fcbarcelona.com
"We are coming into the game with some good form. We'll try and take charge and let's hope we see a good performance."
The Catalans have been boosted by the return of Lionel Messi who scored twice in the 4-0 win over Getafe on Wednesday night in his comeback from a thigh injury.
The Argentinian had been missing since November and spent a long period in his homeland recovering but Xavi is delighted to have the four-time Ballon d'Or winner back in the fold.
"It was an impressive return and he's clearly come back hungry and motivated," he said.
"We are strong and with Leo and Victor (Valdes) back, even more so. There's a lot of competition and the team is looking really good."
Atletico marksman Diego Costa is glad to see Messi back in action, although he hopes the forward has an off-day on Saturday.
"I saw the goals, not the game. Messi is Messi," he told www.clubatleticomadrid.com. "We've all missed him playing because he's Messi, it will be nice to have him in the Calderon.
"I hope it's not his day but we know he'll be up for it as he's been out for so long. But we've got people who can stop him."
Costa has been one of the stars of the season with 19 goals in the league so far and is one of the main reasons Atletico find themselves in the title race alongside the two favourites.
"I think Real Madrid and Barcelona are very powerful squads," he said.
"We are fighting, fighting and doing things right. I know it is very difficult but we will continue doing our thing and going game by game."
He added: "(The team) knows it will be a very difficult game because they are one of the best teams in the world but we know it is our time and we're playing at home.
"We know that is very difficult and we want to take it to Barcelona."
Atletico's only loss of the season so far came in Barcelona against Espanyol in October but they have won their last five league games. Defender Diego Godin (thigh) and Mario Suarez (knee) are their only injury worries.