Tennis' 18-time Grand Slam champion, who captured the Australian Open, Indian Wells and Miami titles this year, skipped the entire clay-court season to improve his chances of winning a record eighth title at the All England Club.
But he quickly fell behind in the second as Zverev, a finalist previous year, who has already won three titles in 2017, charged to a 4-2 lead and held on to take the set.
The top seed suffered a shock loss to veteran German Tommy Haas in his first competitive match on grass this season in Stuttgart, but has built momentum in a tournament that has given him such fond memories over the years.
"It was a very good week for me again making the finals here".
Federer had words of affection for Zverev, who won their semifinal in Halle past year. "I felt good and never let up", said the Swiss, who dropped just nine points on his serve.
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Fourth seed Cilic battled past Gilles Muller of Luxembourg 6-3 5-7 6-4 following an hour's delay to the original order of play, while Lopez came through 7-5 3-6 6-2 after an interrupted encounter with Grigor Dimitrov later on Centre Court.
"It's warm, it's hot, I'm a little bit exhausted".
"Roger is the best player of all time on grass, it will be a very hard match", Zverev said, as quoted on Yahoo. At 35, the Swiss player became the oldest victor of the grass-court tournament.
"I want to extend this part of my career as much as I can, being careful about details and trying not to make wrong choices that can break this ideal balance which allows me to play in a relaxed way, enjoying and winning at 35", Tennis World quoted Federer as saying.
"I was doubting myself a little bit, I must admit, because losing (in the opening) round for the first time in 15 years on grass was always going to shake me a little bit and it did", Federer said.