Wimbledon champion Murray, a three-time finalist in Melbourne, is playing his first grand slam since back surgery in September ruled him out of the final two months of last season.
He has dropped only one place in the standings in that time, behind Spain’s David Ferrer, and cannot face either Nadal or three-time defending champion Novak Djokovic until the semi-finals in Melbourne.
Argentina’s Juan Martin del Potro is the fifth seed ahead of 17-time grand slam champion Roger Federer, with Tomas Berdych, Stanislas Wawrinka, Richard Gasquet and Jo-Wilfried Tsonga rounding off the top 10.
The top 28 seeds correspond directly to the rankings but Canada’s Vasek Pospisil, who lost in qualifying 12 months ago, is elevated to 29th because of Jurgen Melzer’s withdrawal through injury.
Spain’s Fernando Verdasco is the 32nd and final seed.
Williams, who warmed up for the Australian Open by winning the title in Brisbane last week, heads defending champion Victoria Azarenka and fit-again Maria Sharapova in the women’s seedings.
Sharapova missed the final part of last season, including the US Open, because of shoulder problems.
Last year’s beaten finalist, Li Na, is fourth seed ahead of Agnieszka Radwanksa, Petra Kvitova, Sara Errani, Jelena Jankovic, Angelique Kerber and Caroline Wozniacki.
Young American Sloane Stephens, who beat Williams to reach the semi-finals last year, is 13th with Ana Ivanovic 14th and Australian hope Sam Stosur 17th.
Canadian teenager Eugenie Bouchard is seeded for the first time at a grand slam at 30, with injured world No 18 Maria Kirilenko of Russia the only withdrawal from the top 32.
Dan Evans was the sole British survivor on the first day of qualifying at the Australian Open.
The British No 2 is looking to repeat his achievement at last year’s US Open, when he qualified at a grand slam for the first time and went on to reach the third round.
Evans made the perfect start in Melbourne against Chinese Taipei’s Huang Liang-chi, pulling away after a tight opening to win 6-1 6-2.
The 23-year-old from Birmingham next meets Hungarian Marton Fucsovics, ranked 33 places below Evans’s 149. There was not good news for Britain’s other two representatives in the men’s draw, with James Ward losing to Italy’s Andrea Arnaboldi 7-6 (7/2) 6-4 while Dan Cox was beaten 6-4 6-1 by American Denis Kudla.
Women’s qualifying begins today, with Heather Watson, Johanna Konta and Tara Moore the three Britons in action.
Murray, meanwhile, warms up with an exhibition match against Lleyton Hewitt at Kooyong tomorrow.