Nadal had been beaten twice previously this season by the experienced Fognini, in Rio de Janeiro and then in Barcelona.
But he gained his revenge in the northern German city, recovering from being broken in the very first game of a tight opening set and eventually clinching the title on his first match point after more than two and a half hours on court.
Nadal has now won the Hamburg title twice after a previous success in 2008 and has 47 claycourt titles in a remarkable career which had taken a major downturn in recent months.