The top-ranked Federer kept his focus through a two-hour rain delay before completing a 6-3, 6-0, 6-4 win to clinch the best-of-five playoff series.
Federer defeated Simone Bolelli in his opening singles Friday and posted two points for Switzerland less than a week after his five-set loss to Juan Martin del Potro in the U.S. Open final.
"It was a tough weekend for us and I'm happy I could help Switzerland win," Federer said. "I was able to play very well."
With Federer sitting out, Italy's team of Starace and Bolelli beat Stanislas Wawrinka and Marco Chiudinelli in the doubles Saturday.
Federer was looking forward to some more rest over the next two weeks.
"I have to go on holiday badly. I have a problem with my leg, I have a problem with my arm - everything is hurting," he said. "And I've got to do some baby-sitting. I've been spending a lot of time on the tennis court the last few weeks."
Federer's wife Mirka gave birth to twin girls in July.
Fabio Fognini of Italy beat Michael Lammer 7-5, 7-6 (4) in the final singles match to make the final score 3-2.
The Federer-Starace match was suspended due to rain with Federer ahead 6-3, 4-0 on the red clay courts at the Valletta Cambiaso club.
Federer responded well to an array of drop shots from Starace before the rain delay, then resumed after the break as sharp as before, finishing off a streak of nine games won in a row.
Starace, the lowest-ranked player on Italy's team at No. 90, replaced Andreas Seppi against Federer. It was Starace's first loss in 11 Davis Cup singles matches.
"I tried everything, but he was particularly good today," Starace said.
While it didn't quite match his stunning shot against Novak Djokovic at the U.S. Open a week ago, Federer again won a point with a shot through his legs after chasing down a lob. Starace replied but missed a volley wide, setting off a loud round of cheers for Federer. A large group of red-clad Swiss supporters bowed and Italian fans also applauded.
Federer stretched his winning streak in Davis Cup singles matches to 12, dating back to his five-set loss to Lleyton Hewitt of Australia in the 2003 semifinals.
Winning the Davis Cup is one of the few achievements missing from Federer's long list of accomplishments.
Keirrison open to Roma loanFederer chosen to play 3 matches against Italy
