The Spaniard, who suffered a mechanical failure while leading on the last lap of his home Jerez race and was hit from behind by Marco Simoncelli - bringing them both down - blasted past pole sitter Simoncelli along the back straight during the opening lap, then rode into the distance.
Mapfre Aprilia rider Bautista, sixth at the Qatar season-opener but a former Estoril winner in both 125 and 250, eventually won round three by an untouchable 7.050secs over Simoncelli, while Jerez winner Mika Kallio mounted a late charge to draw alongside Simoncelli's Gilera on the run to the flag.
But when Simoncelli made a last-gasp change of direction to try and shake off the Finn, the two made contact, allowing Simoncelli to confirm second position - and his first 250GP podium - by a slim 0.013secs over the furious KTM rider.
The fight for fourth between Mattia Pasini, Hiroshi Aoyama and Yuki Takahashi was just as close, with championship leader Pasini falling after a collision with Aoyama six laps from the finish - for which the polite Japanese later apologised - but Pasini soon had much greater worries.
After remounting, the Italian suffered a huge scare when he arrived at the end of the back straight without a front brake, which had been damaged in the earlier fall. The inevitable accident fortunately left Pasini unhurt, but his Polaris World Aprilia flipped high into the air before coming to a rest.
Kallio now leads the world championship by 12 points over Pasini, with Bautista up to fifth and 22 points from the top.
Race results - Estoril:
1. Bautista (Aprilia)
2. Simoncelli (Gilera) +7.050secs
3. Kallio (KTM) +7.063secs
4. Luthi (Aprilia) +12.998secs
5. Aoyama (KTM) +14.666secs
6. Takahashi (Honda) +18.498secs
7. Simon (KTM) +26.812secs
8. Barbera (Aprilia) +28.012secs
9. Faubel (Aprilia) +28.288secs
10. Pesek (Aprilia) +36.966secs
15. Laverty (Aprilia) +1min 21.363secs