The visitors qualified for the final 16 by topping their group, while their hosts dropped into the Copa Sudamericana after finishing third in their Copa Libertadores group.
Match preview
Nacional come into the Copa Sudamericana knockout stage having narrowly missed out on second spot in their Copa Libertadores group after a commendable effort.
The Bolso looked set to drop out after collecting just one point from their opening three games, but a draw with Atletico Nacional gave them a glimmer of hope going into the final two games.
They started with a crucial 1-0 win over second-placed Universidad Catolica, as Brian Ocampo netted the only goal of the game in the 29th minute to see his side stay in the race for qualification to the knockout stage.
Nacional then finished the group stage with an eye-catching 2-0 win over group leaders Argentinos Juniors thanks to late goals from Gonzalo Bergessio and Ocampo, but a Universidad Catolica victory over Atletico Nacional on the final day meant the Uruguayan outfit missed out on the top two by just one point.
Nevertheless, they have not lost out on continental football completely, with the third-placed finish granting passage into South America's second competition, and fellow Uruguayan side Penarol await them.
Heading into the home leg, Alejandro Cappuccio's side will take confidence from their league meeting with Friday's opponents earlier in July, as Ocampo and Camilo Candido fired them to a 2-0 win in the Uruguayan top flight, seeing Nacional keep hold of third spot.
Their opponents will aim to gain revenge for that recent defeat and give their quarter-final hopes a boost with a positive result in the away leg on Friday.
They earned one of just eight places available for progression in this tournament by finishing at the top of their group with 13 points.
Penarol looked set to confirm their advancement as they won their opening four games of the group stage, moving onto 12 points with two games left to play as they aimed to keep hold of top spot.
The visitors started with a 5-1 thrashing of Sport Huancayo before recording a 3-0 win over River Plate Asuncion, as well as 4-0 and 2-0 victories in their two games against Brazilian outfit Corinthians.
However, a 2-1 defeat to River Plate Asuncion in their fifth outing meant the Uruguayan side still had work to do going into the last game, and they comfortably managed to fend off the side who defeated them previously as Penarol drew 1-1 with Sport Huancayo, while the team in pursuit of the top spot fell to a 4-0 thrashing at the hands of Corinthians.
The Aurinegros head into the round of 16 with high hopes of reaching the quarter-finals, as they square off against Uruguay's other most successful side in a two-legged affair.
Nacional form (all competitions):
Penarol Copa Sudamericana form:
Penarol form (all competitions):
Team News
Nacional were recently boosted by the return of winger Brian Ocampo, after he was named in the Uruguay squad for the Copa America.
He will play a key role in their attacking line, having registered two goals and an assist in six games in the Copa Libertadores group stage as well as getting on the scoresheet in the recent win over Friday's opponents.
The line should be led by experienced forward Gonzalo Bergessio, who netted the other goal in the recent victory over Penarol to take his tally to 10 goals in 10 appearances in this season's Uruguayan top flight, while he also hit four goals in their six Copa Libertadores games.
Penarol could remain without star forward Agustin Alvarez through injury, with the 20-year-old having hit eight goals in their eight Copa Sudamericana games this season, including a hat-trick in their 4-0 win over Corinthians.
In his absence, they should continue to turn to Ariel Nahuelpan, who found the net in their recent 2-0 league win over Cerrito.
Kevin Dawson will continue to line up between the sticks, having kept 10 clean sheets and conceded just 12 goals across 18 appearances in the Copa Sudamericana and Uruguayan top flight this season.
Nacional possible starting lineup:
Rochet; Mendez, Marichal, Corujo, Candido; Neves, Piriz; Ocampo, Fernandez, Trezza; Bergessio
Penarol possible starting lineup:
Dawson; Gonzalez, Formiliano, Kagelmacher, Piquerez; Musto, Trindade; Canobbio, Ceppelini, Torres; Nahuelpan
We say: Nacional 2-1 Penarol
The hosts will fancy themselves on Friday after defeating their opponents in league action recently, and they will see it as crucial that they make the most of the home advantage and take a lead into the away leg.
While Penarol looked strong in the group stage, the injury to Alvarez could hit their front line hard, limiting the threat they pose to their Uruguayan rivals.