2006 French Open
Before Friday, Nalbandian, led their head-to-head 6-5 and beat the Swiss in the final of last year's Masters Cup.
The Argentine, built like a tank, went after Federer's serve from the start.
Nalbandian's retirement was the ninth such withdrawal from the men's singles on the energy-sapping clay at Roland Garros.
It also curtailed what had developed into a scintillating match on a bright, breezy centre court.