The Diablo 2 Wiki
The Diablo 2 Wiki archive is available for anyone looking for information on Diablo 2. All information here is pre-D2R but contains a lot of useful information that is still relevant. Updated sections for new D2R features can be found on the PureDiablo Diablo 2 section


From Diablo 2 Wiki

Nightmare is the second of three difficulties found in diablo II. It is reached by killing Diablo on normal, or killing Baal on normal if you are playing the expansion.

You will receive a -50 to all resistances upon entering Nightmare, and when the monster are also increased in level, the difficulty of the game increases considerably. As monsters are higher levels, they also drop (have a chance to drop) better items, for more upon this see the respective item sections.