Jason Chimera, Nate Schmidt and Nicklas Backstrom also scored to help Washington reach 63 points and become the first team with 30 wins. Holtby improved to 26-4-2, including 18-0-2 in his last 21 games.
It was the teams’ first meeting since the Capitals won a seven-game series with the Islanders in the first round of the playoffs last season.
Ovechkin gave Washington a 2-0 lead with his 22nd goal of the season with 4:15 left in the first period. Islanders defenceman Adam Pelech coughed up the puck in the offensive zone and the Capitals' Karl Alzner took the puck and skated up the right side. He dropped it to Ovechkin, and the 30-year-old Russian wristed a shot past Halak from the right faceoff circle.
Nelson got the Islanders on the scoreboard 1:59 into the second. He took a pass from Ryan Strome in the high slot and fired a wrist shot past Holtby for his 14th of the season.
Ovechkin had a chance for No. 498 about 9 minutes into the second, but the puck clanged off the crossbar.
Washington restored its two-goal lead later in the period. Backstrom dropped a backhand pass to Schmidt, and he fired a one-timer from the top of the left faceoff circle for his second of the season with 4:06 to go.
Backstrom capped the scoring with an empty-netter with 2:42 remaining in the game.
Chimera got the Capitals on the scoreboard 5:45 into the game. Marcus Johansson grabbed the loose puck after taking the faceoff in the Islanders' zone, skated behind the net and passed it to Chimera, who backed up and sent a shot that deflected up off Pelech's stick and in off Halak.
NOTES: Ovechkin would be the 43rd player to reach 500 goals. In his 11th NHL season, he is already one of only six players to reach at least 50 goals a half-dozen times. The others: Wayne Gretzky, Mike Bossy, Mario Lemieux, Marcel Dionne and Guy Lafleur. ... Mike Richards met with the media before the game, a day after agreeing to a one-year deal with the Capitals. The 30-year-old centre became a free agent after Los Angeles bought out the remaining five years of his contract last summer following his arrest at a Canadian border crossing in June on charges of possession of a controlled substance. ... Halak was activated off injured reserve on Tuesday after missing five games due to an upper body injury and played for the first time since Dec. 21. Backup Thomas Greiss started each game in Halak's absence. G Christopher Gibson, called up from Bridgeport of the AHL when Halak was put on IR, was sent back down to the Sound Tigers. ... The Islanders were playing the top team in the league for the second straight day. Dallas came in with the NHL's highest point total on Sunday but lost 6-5. Washington beat Boston on Tuesday night to move into the league lead.