Nadal's eight-year winning run at the ATP 1000 event was ended in the final in 2013, when Djokovic claimed a straight-sets victory in the decider.World number one Nadal has been below his best since a back injury hampered him in his Australian Open final loss to Stanislas Wawrinka.
The Spaniard reached the third round at Indian Wells and was runner-up to Djokovic in Miami, and a return to clay comes at the right time.
Nadal has lost just five matches on the surface since 2010 and he won the Rio de Janeiro title earlier this year.
He may have been beaten in his past three meetings against Djokovic but he has won four of their previous five matches on clay.
Djokovic collected back-to-back Masters crowns in the United States and takes that confidence to the Monte Carlo Country Club.
Swiss 17-time grand slam champion Roger Federer is set to make his first appearance since 2011 at the event after accepting a wildcard.
Federer has never won the tournament but did lose three straight finals (2006-08) to Nadal.
World number eight Andy Murray is scheduled to miss, having competed at several events since returning from back surgery.
Spaniard David Ferrer, Czech Tomas Berdych and Frenchman Richard Gasquet are the other top-10 players in the draw.
Nadal and Djokovic shape as being incredibly hard to stop.
Frenchman Jo-Wilfried Tsonga is struggling for form, while Italian Fabio Fognini may fancy his chances after leading Italy to a Davis Cup win over Great Britain.
Fognini beat Murray during the tie but he has already lost to the likes of Djokovic, Nadal and Alexandr Dolgopolov this year.
Dolgopolov is perhaps the best chance at going deep outside of the top two.
The Ukrainian reached the final in Rio, semi-finals at Acapulco and Indian Wells and last eight in Miami.
Dolgopolov has beaten the likes of Nadal and Wawrinka in 2014 and will be eager to take another step.
Bulgarian Grigor Dimitrov won the title in Acapulco but dropped off with consecutive third-round exits at the Masters events.
Croatian Marin Cilic was the first ATP player to reach 20 wins this season, yet he is unlikely to threaten on clay.
It should leave Nadal and Djokovic battling for the crown and the Spaniard will be desperate for a ninth Monte Carlo title.