The slick new Sepang asphalt was made even slicker by rain at the start of the session, but began drying thereafter, although the surface remained damp to the end.
A frantic end to the session saw lap times tumbling, with championship leader Gabor Talmacsi holding a 1.5secs advantage with one minute to go.
The Hungarian was then pipped by Lukas Pesek, before Nieto - whose last 125cc pole came in 2003 - stole a near three second lead over the field! Mattia Pasini later squeezed into second place, 2.706secs behind the Spaniard, while Pesek and Talmacsi maintained their provisional front row positions.
But Talmacsi's Aspar Aprilia team-mate and title rival Faubel was less fortunate, the Spaniard being left 11.551secs from Nieto, in 31st position, after apparent bike problems left him a non qualifier.
Faubel enters the Malaysian Grand Prix just one point from Talmacsi.
First qualifying – Sepang:
1. Nieto (Aprilia)
2. Pasini (Aprilia) +2.706secs
3. Pesek (Derbi) +2.887secs
4. Talmacsi (Aprilia) +2.955secs
5. Bradl (Aprilia) +3.679secs
6. di Meglio (Honda) +4.017secs
7. Cortese (Aprilia) +4.169secs
8. Rabat (Honda) +4.173secs
9. Ranseder (Derbi) +4.485secs
10. Smith +4.592secs
17. Webb (Honda) +6.809secs
