Hamilton was handed the demotion after his Mercedes team made an unscheduled gearbox change following the Azerbaijan Grand Prix a fortnight ago.
"It's been a really good Friday with no major headaches to complain about so far", said three-time world champion Hamilton.
It would be Hamilton who drew first blood as he led for most of the 90-minute session, with Max Verstappen second for Red Bull at their home circuit.
Bottas was 0.370s adrift of his Mercedes teammate in third place after suffering a spin at Turn 1, while Vettel was also within half a second of the fastest time. Lewis was quickest this morning with the soft, so obviously they have a quick auto but still to be quickest on that tire shows it is pretty durable and strong around here.
"This track punishes you if you make a mistake, and I tested those limits, but that's something I can learn from", the Finnish driver said.
Verstappen, fourth fastest in P2, said his tires were "all over the place" in the afternoon.
Further down the field, there was encouragement for McLaren drivers Fernando Alonso and Stoffel Vandoorne as fresh Honda power units helped them run in the top 10 across the sessions.
Championship leader Sebastian Vettel was fourth, 0.449s off title rival Hamilton, and was one of the cars to spin early in the session after losing the rear of his vehicle on the Turn 1 apex.
Vettel got closer in free practice two, but he still could not match the man closest to him in the drivers' championship.
Rarely are the fortunes of the fourth and fifth-placed drivers in a race so tightly scrutinised but, then again, it is also just as uncommon to see a driver deliberately spear his auto into an opponent as Vettel did to Hamilton in Baku.