The 20-times Grand Slam champion took to the John Cain Arena court in the late afternoon and appeared unhampered as he hammered balls across the net with trademark ferocity.
Nadal pulled out of Spain's ATP Cup tie against Australia on Tuesday with a lower back problem and said later in the week he was still far away from the level required to play at the year's first Grand Slam.
The 34-year-old played no part in his country's ATP Cup campaign, which ended in a 2-0 semi-final defeat at the hands of Italy on Saturday.
Australian Open tournament director Craig Tiley told local media that he was in daily communication with Nadal and that the Mallorcan had skipped the ATP Cup out of "extra caution".
"He's out practising and he's indicated he'll be ready," Tiley said on Saturday. "He's protecting his opportunity to win a 21st grand slam."
Nadal, who has suffered regularly from back injuries throughout his career, rarely plays competitive matches in the week before Grand Slams.
He said last weekend that during his 14 days of obligatory quarantine in Adelaide he had trained for only 2 1/2 of the five hours he was allowed under health protocols.
With Roger Federer deciding to skip the Australian Open this year as he recovers from knee surgeries, the door is open for Nadal to move out of a tie with his great rival on 20 career Grand Slam titles.
Nadal, who has won the Australian Open just once back in 2009, is scheduled to get his campaign underway on Tuesday with a first-round match against Serbian Laslo Djere.