The Argentine captured the first five points of the tiebreaker before winning 7-4 to claim his 11th career title and first in the United States.
"I felt I played good all week," said Nalbandian, a wild card entry who missed much of 2009 following hip surgery and several months this year with a hamstring injury.
"I'd been practising well but I didn't expect to win my first tournament back."
While Baghdatis landed only 41 percent of his first serves, including 39 in the second set, it was his failure to win the big points that cost him the match as the 25th-ranked Cypriot converted only two of his 11 break-point opportunities.
Nalbandian broke Baghdatis in the first game of the match at love and dominated the opening set on a sultry day in Washington. Cheered on by a boisterous flag-waving Argentine contingent in the crowd, he also broke Baghdatis in the seventh game before closing out the set in 32 minutes.
Kuznetsova triumphs
Svetlana Kuznetsova overcame a bout of mid-match nerves to grind down Agnieszka Radwanska 6-4, 6-7, 6-3 and clinch the San Diego Open on Sunday.
The Russian Kuznetsova blew four match points in the second set tiebreak to gift Radwanska the set but roared back to life in the third to take her first title in 10 months.
Kuznetsova double faulted on two of her four match points during a second set tiebreak where she squandered leads of 4-0 and 6-3 to allow Radwanska back into the match.
After falling behind 2-1 to start the third set, Kuznetsova grabbed control of the match from just inside the baseline with a series of winners before clinching the title with a backhand down the line.
The victory provides a timely return to form for Kuznetsova ahead of the US Open, and will propel her to 14th when new rankings are released on Monday.
Somdev fails to qualify
Somdev Devvarman failed to make the singles main draw of the Toronto ATP Masters after going down fighting against third seed Denis Istomin of Uzbekistan in the second round of the qualifying event.
The 14th seed Indian lost 6-4, 3-6, 6-7 (10-12) to the world number 54 Uzbek in the second and final round.
Federer turns 29
Roger Federer celebrated his 29th birthday Sunday with a tournament cake as the two-time champion prepared for a second-round start at the Toronto Masters.
The world number three is sitting on his lowest ATP ranking since late 2003, when he went into the season-ending Masters Cup in Houston third in the world. Federer showed how little the number meant as he won the event seven years ago, beating Andre Agassi in both group play and the final.
“It’s a great feeling to be celebrating my birthday with my family here in Canada. I am excited to compete again these days, after having spent several weeks preparing intensely for the second half of the 2010 season,” Federer told his website.
He noted to loyal fans that “your kind messages and wonderful gifts” have been arriving. “This really motivates me as I can see how much my passion for tennis also means to you,” he said. “I would like to thank you all for your loyalty over all these years - let’s hope for many more to come!”
