Bagnaia, who leads the world championship standings, was fastest on a drying track at the Sachsenring with a time of 1 minute 21.409 seconds, 0.078 seconds ahead of VR46 Racing's Luca Marini - MotoGP great Valentino Rossi's half-brother.
"It was quite difficult this morning. It was very easy to commit mistakes and lose lap times with the yellow flags," said Bagnaia, who won last week's Italian Grand Prix.
"I'm happy with the work done so far."
Bagnaia also claimed pole at the Sachsenring in 2022.
Jack Miller completed the front row, ending third-fastest on the Red Bull KTM.
"It's super important to have a good qualifying here and to be back on the front row. I think we can do a good job from here," Miller said.
Pramac Racing's Jorge Martin and Johann Zarco will start from the second row, alongside Marco Bezzecchi, who ended in fifth despite crashing in Q2.
Honda's six-times MotoGP world champion Marquez was seventh after crashing in both Q1 and Q2, his worst showing in qualifying at the German Grand Prix, which he has won eight times.
However, the most harrowing of Marquez's crashes occurred in practice on Friday, when he was dumped in the gravel after his bike went from under him and slammed into Zarco, nearly cutting the Pramac Racing rider's motorcycle clean in half.
Marquez's brother Alex (Gresini Racing) was just behind him in eighth, while Red Bull KTM's Brad Binder was ninth after topping Q1.
France's 2021 world champion Fabio Quartararo was 12th.
