Spain's Martin is just 13 points behind the Italian reigning title holder with three races to go in a season which is too close to call.
But Prima Pramac's Martin has the momentum and the Madrid native, who is pursuing his maiden world crown, topped the timesheets in the first free practice with a lap of one minute and 59.513 seconds on his Ducati.
Rival Bagnaia, on a factory Ducati, made a more sedate start and was 1.375sec off Martin's pace in cloudy but dry conditions.
Marco Bezzecchi, also of Italy, is mathematically still just about in the championship hunt and went eighth-fastest, 0.738sec off Martin's leading time.
Gresini Racing's Alex Marquez was second, 0.049sec behind his fellow Spaniard Martin, with Frenchman Johann Zarco third.
The Malaysian Grand Prix on Sunday is followed by races in Qatar and the season-ender in Valencia.
