The 19-time Grand Slam champion had to fend off a host of break points before wrestling control of the contest for a 6-3 7-6(1) win in Geneva.
Europe now leads 7-3 overall, with Nadal set to team up with Stefanos Tsitsipas against Jack Sock and Nick Kyrgios in the doubles.
A total of 13 points is required for victory on Sunday, when each match will be worth three points to the winner.
Raonic has suffered an injury-interrupted season and missed the recent US Open, where Nadal clained his 19thmajor title.
I feel very luck in the first set – Rafael Nadal
It was the Canadian who made the early running at Palexpo, however, racking up eight break points in Nadal’s opening three service games but failing to convert.
The Spaniard was more clinical, moving ahead in game seven and breaking again to seal the set in game nine.
There was little to separate the pair in the second set, Raonic finally converting a break point at the ninth attempt only for Nadal to hit straight back in the next game.
Nadal made sure he avoided the potential danger of a 10-point shootout as he raced into a 6-0 lead in the tiebreaker, earning match point with a spectacular forehand pass and closing it out with another winner off his favored wing.
“I feel very luck in the first set,” said Nadal.
“An unlucky set for him, I think he deserved it for sure.
“Later in the match I started to play better with a higher percentage on the serve and start moving myself a little bit better.
“I think in the end I played a very good tiebreak with some good shots, so very happy to help Team Europe be 7-3 – it’s great news for us.”