The British number one is the second seed and could meet third-seeded Nadal, winner of the tournament for a record eight years in a row, in the semi-finals.
Murray, making his claycourt debut for the season, has never beaten Nadal on the red dirt. They have played four times, including twice in Monte Carlo - at the semi-final stage in both 2009 and 2011.
Scot Murray may first have to get past France's Jo-Wilfried Tsonga in the last eight. Nadal's scheduled quarter-final opponent is Serb Janko Tipsarevic.
Murray, handed a first-round bye, will open against Robin Haase or a yet-to-be-decided qualifier, while Nadal's first match of the tournament will be against Fernando Verdasco or Marinko Matosevic.
In the top half of the draw, top seed Novak Djokovic is seeded to face Juan Martin Del Potro in the quarter-finals before a projected semi-final clash with fourth seed Tomas Berdych.
Djokovic has been nursing an ankle injury sustained last weekend.
Roger Federer is skipping the event and will not return until the Madrid Open at the start of next month.
The main draw of the third Masters 1000 tournament of the ATP season gets under way on Sunday.