The world number one - who had previously won the exhibition tournament for three successive years from 2011 to 2013 - triumphed 4-6 7-5 7-5 in a highly competitive final in Abu Dhabi on Saturday.
Anderson would go on to be beaten by Novak Djokovic, but gave a good account of himself in the win over Nadal.
The 32-year-old Nadal returned to the court here on Friday for the first time since injury forced him to retire from a US Open semi-final against Juan Martin del Potro on September 7, reports Efe.
'I am happy as a tennis player to see a new generation of players coming up and winning big titles like Alexander Zverev, Karen Khachanov, Dominic Thiem and Chung Hyeon as well, ' said Djokovic, who lost to Zverev in the ATP Finals championship clash.
"I practised here and played real matches so it is a great way to start the season".
The Serb then increased his power and won the final set with the same result to win the title.
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Khachanov said of that setback: "I had a few chances opportunities in the first few games, there was a few times it was 0-30 on his serve". I could feel the tension between us, two great competitors. When you play someone like this at this level you want to win.
"I didn't take them and after a tough game at 4-4 again I missed some shots and he played some good points and he got the break". "I am grateful that this season has taught me a lot about myself as a tennis player and as a person".
"There are still things that I want to achieve", he said.
"I started about two weeks ago and I am taking small steps forward".
Before the final, fans were treated to a special exhibition match between world number eight Dominic Thiem and Paris Masters victor Karen Khachanov, following the unfortunate withdrawal of Rafael Nadal from the third-place play-off.
In the super tiebreak, Khachanov raced away to a 5-1 lead aided by a couple of unforced errors from Thiem and didn't face much resistance as he wrapped up the match in 10-3 in an hour and 24 minutes.