In hot and dry conditions at the Buriram International Circuit, the Spanish Pramac rider clocked a best lap time of one minute 29.826 seconds ahead of his fellow countrymen Maverick Vinales and Aleix Espargaro.
Martin crashed in the final minutes of the afternoon practice but appeared uninjured after his bike skidded and flipped multiple times.
"I thought we were going to be a bit faster actually," Martin told reporters.
"I feel more ready for the sprints than for Sunday. I think Sunday will be a really long race."
In the overall world standings, Italian Ducati ace Bagnaia is 27 points clear of Martin in second place in what is shaping up to be a two-horse race for the title.
Martin is keen to put a disastrous fortnight behind him after a nightmare performance crashing out in Indonesia to throw away his championship lead, as well as a bad final lap that cost him a win in Australia last weekend.
The top 10 times from Friday's afternoon practice automatically qualified for Q2 and will be joined by the fastest two riders from Q1 to determine the first five rows of the grid both for Saturday's sprint race and Sunday's main event.
Rounding out Q2 are France's Johann Zarco and Fabio Quartararo, Italians Luca Marini and Marco Bezzecchi, South Africa's Brad Binder and Spain's Augusto Fernandez.
Bagnaia - who is seeking to defend his title - finished third in Thailand in treacherous wet conditions last year, while Martin came home ninth.
Rain could again play a part, with a chance of thunderstorms on Saturday afternoon when the 13-lap sprint will take place, and again on Sunday for the 26-lap grand prix around the 4.554km Buriram International Circuit.
Up to 37 points are at stake this weekend, with four races of the 20-leg season to go.
In a change of format since the mid-season break, the first practice on Friday had no bearing on Saturday's qualifying order, leaving riders and teams to try out different bike and tyre set-ups without consequence.
In the morning session, Martin also blitzed the field ahead of Vinales and Pol Espargaro.
