The Dutchman swept around his team's home track in one minute and 06.302 seconds, 0.255 seconds quicker than Ferrari's Charles Leclerc over the 4.3km long lap.
George Russell was third for Mercedes ahead of Verstappen's Red Bull teammate Sergio Perez, who put in a late flyer to drop Lewis Hamilton down to fifth.
Kevin Magnussen was sixth for Haas.
Ferrari's Carlos Sainz, Formula One's newest winner after racing to his first victory less than a week ago in Silverstone, was seventh.
Verstappen leads the standings by 34 points from Mexican Perez and is 43 clear of Leclerc.
Austria marks the halfway point of the 22-race season and the Dutchman is bidding to return to the top of the podium after Sainz's British win ended a six-race victory streak for Red Bull.
Verstappen has won four times at the scenic circuit.
The Austrian Grand Prix weekend is being run to the sprint format with qualifying later on Friday setting the grid for a shorter 'sprint' race on Saturday.
The result of the Saturday sprint will set the starting line-up for Sunday's grand Prix.
The opening hour of practice was therefore the only preparation teams had heading into qualifying.
McLaren lost valuable track time after Lando Norris parked up on the escape road at turn six after reporting smoke coming from underneath his seat.
The Briton propped up the timesheets in last and Australian teammate Daniel Ricciardo struggled with a wildly oscillating drag reduction system flap.
Norris' stoppage brought out the first of two red flags.
The second half was called to allow the circuit crew to clear up debris from the racing line. The session otherwise ran without incident.