Nadal entered the draw as the top seed having finished 2017 as the oldest year-end world No 1 ever.
But the 31-year-old also flew to Australia under an injury cloud and has still not played a competitive match since withdrawing from the ATP World Tour Finals in November because of a knee injury.
However, Nadal has played in two exhibition tournaments this week with no apparent pain and is expected to be fully fit for his first-round clash with Victor Estrella Burgos.
The world No 81 will be facing Nadal for the first time ever at the age of 37 with either Nicolas Jarry or more likely Argentina’s Leonardo Mayer awaiting the winner in the second round.
But the world No 1’s first real test of the Australian Open could come in the fourth round, if No 16 seed Isner makes it through his first three matches.
The American recorded his first ever win over Nadal last year, beating the Spaniard 7-5, 7-6 at the inaugural Laver Cup competition in September.
Federer meanwhile looks set to make what is now customarily serene progress through the early rounds after being handed a kind bottom quarter.
The Swiss, who played three five-setters including the final at last year’s tournament, will take on former Brit Aljaz Bedene in the first round, an opponent he has also never faced before but is unlikely to cause him many problems.
But even by the time he reaches the stage where he can face other seeds, it looks hard to believe he will be challenged.
World No 31 Richard Gasquet is on an eight-match losing streak against Federer and could face him again in the third round while Sam Querrey or Milos Raonic are the potential fourth-round opponents.
Novak Djokovic was regarded as a “dangerous floater” as the No 14 seed after six months off – he will have to come through Donald Young and then probably Gael Monfils, and if he wants to make the quarter-finals he will probably have to come through Alexander Zverev.
And Djokovic’s difficult draw appears to have been reflected in the betting markets. Roger Federer remains a 7/4 favourite with Betfair but the Serb, who had joined Nadal yesterday as joint second favourite, is now back to 6/1 while Nadal has shortened up to 7/2.
Australian Open 2018 odds (Betfair)
Roger Federer 7/4, Rafael Nadal 7/2, Novak Djokovic 6/1, Grigor Dimitrov 10/1, Alexander Zverev 14/1, Nick Kyrgios 14/1, JM Del Potro 14/1, David Goffin 18/1, Dominic Thiem 25/1, Stan Wawrinka 25/1, Marin Cilic 30/1, Milos Raonic 40/1, Kevin Anderson 40/1, Jack Sock 50/1.