Rafael Nadal was forced to pay tribute to Roger Federer's injury comeback
Nadal twice went a set down but battled his way back into the match and led 3-1 in the decider.
But Federer broke back twice and converted his second match point to seal a fifth Australian Open title.
And Nadal paid tribute to the 18-time Grand Slam champion, who took the last six months of 2016 off to recover from a knee injury.
Roger Federer wins 18th Grand Slam title beating Rafa Nadal in Australian Open
Sun, January 29, 2017
Roger Federer has won his 18th Grand Slam title after beating Rafa Nadal in the Australian Open
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Roger Federer has won his 18th Grand Slam title
"It's amazing the way Roger played after such a long time without being on the tour," said Nadal.
"It's so difficult to make that happen.
"For sure, you have been working very hard to make that happen."
Rafael Nadal has now lost his last three Australian Open finals
Nadal himself has struggled with injury, having spent the off-season struggling with a wrist injury.
And he was thankful just to have been able to play at full fitness in Australia.
"It's been a great month for me personally," added Nadal.
Roger Federer has now won five Australian Open titles
"For the first time in my career I've spent a full month in Australia, playing Brisbane and Sydney before three weeks here.
"I've enjoyed it a lot. This is a beautiful country and I've had a lot of support.
"It's been a great two weeks.
"I've had a hard time not being able to compete at full condition with some injuries.
"That's not new for me but it's still always tough when it happens.
"I worked very hard to be where I am today.
"But probably Roger deserved it a little bit more than me."