Schwartzman, seeded 11, made a dream start in a rain-affected match, winning the opening set of the quarter-final 6-4 on Wednesday evening.
The Argentina Davis Cup star broke Nadal's serve five times before play was halted for the day, with Nadal leading 5-3 in the second set.
Nadal looked like a new man when the action resumed on Thursday. He closed out the second set 6-3 before winning the third 6-2.
The Spaniard moved into overdrive as Schwartzman was unable to reach the heights of the previous day, as Nadal won the fourth set 6-2 to close out the match and book his place in the last four.
Defeat was a bitter pill for Schwartzman to swallow, but on the signs of this performance, he will approach the next grand slam tournament - Wimbledon - full of confidence.