Bagnaia, on the medium front, is now up to 13th, 1.3s from Alex Marquez, the rider he is trying to catch for second in the world championship.
Alex Marquez sets a 1m 28.3s to move to the top, with Bezzecchi slotting into second and Acosta is now third.
Former Phillip Island MotoGP winner Johann Zarco is fourth for Honda, ahead of Binder.
Almost all riders are using the soft front and medium rear tyre combination, but Pol Espargaro and Francesco Bagnaia are now on track with the medium front.
20mins to go:
- Brad Binder
- Marco Bezzecchi
- Fabio di Giannantonio
- Fabio Quartararo
- Alex Marquez
- Pedro Acosta
- Jack Miller
- Joan Mir
- Fermin Aldeguer
- Pedro Acosta
- Raul Fernandez
- Johann Zarco
- Luca Marini
- Alex Rins
- Enea Bastianini
- Franco Morbidelli
- Miguel Oliveira
- Francesco Bagnaia
- Lorenzo Savadori
- Somkiat Chantra
- Michele Pirro
- Ai Ogura
Pedro Acosta does a superb slide through Stoner corner, he's currently sixth for KTM, 0.374s behind Binder who is still holding P1.
Team manager Davide Tardozzi doesn't want to hear anymore, leaves the box and heads back to the pit wall.
Ducati are doing their best to block the TV cameras, but Bagnaia can be seen gesturing - again - that the bike is shaking like crazy.
There is a Ducati GP25 in the top 3, but it's not Bagnaia, but Fabio di Giannantonio.
Bagnaia has improved, but is only 16th. Serious faces in the Ducati pits as Bagnaia walks in.
Meanwhile, Brad Binder - currently the subject of speculation over a possible crew chief change for 2026, with Toprak Razgatlioglu's crew chief Phil Marron set to return to MotoGP by joining KTM - goes 0.013s quicker than Bezzecchi to take over P1.
Marco Bezzecchi is already practising the long lap loop, he'll need to make two trips through it on Sunday.
Bagnaia has now done 4 laps... but is only 20th.
Also starting well is Yamaha's Fabio Quartararo, now up to second place behind Bezzecchi after 8 laps.
KTM test rider Pol Espargaro, replacing Maverick Vinales at Tech3, is in the top ten. An impressive start for the Spaniard, who said he hasn't ridden the RC16 since his last stand-in appearance.
Bagnaia heads back out - Ducati will hope he doesn't pit straight away again.
Meanwhile, Aprilia's Marco Bezzecchi is setting the early pace from Alex Marquez and Pedro Acosta.
Franco Morbidelli is the first faller of the Australian MotoGP weekend, at Turn 1. The VR46 rider loses the front but walks away.
Meanwhile, it's not a good start for Francesco Bagnaia, who pulls straight back into the pits and is gesturing angrily about the bike shaking.
Ducati's Mauro Grassilli is asked about Marc Marquez's recovery timeline by Dorna pit lane reporter Jack Appleyard, but dodges the questions.
He does reveal that Michele Pirro will also replace Marc Marquez at Sepang next weekend, but with Marquez now in doubt for Portimao and Valencia, it still leaves the door open to a WorldSBK rider stepping in for the #93 at some stage.
A reminder of the Official Phillip Island MotoGP Records:
Best lap: Jorge Martin, Ducati, 1m 27.246s (2023)
Fastest race lap: Marc Marquez, Ducati, 1m 27.765s (2024)
The green lights are on and MotoGP FP1 starts at Phillip Island.
It's dry but only 14 degrees air temp as riders put their helmets on ahead of FP1.
With Bagnaia's team-mate and new world champion Marc Marquez absent due to injury, Ducati test rider Michele Pirro is in action for the first time this year.
Meanwhile, Marco Bezzecchi will have a double long penalty to serve on Sunday for causing the accident that left Marquez with a right shoulder injury.
Among those being most closely watched during their opening laps will be Francesco Bagnaia:
"It depends on what I will feel on the bike, because if I feel like in Motegi, I can fight for podiums, I can fight for the win and for something important. In case I feel again like in Mandalika, it will be a tough weekend and the thing will be to finish races."
Moto2 title leader Manuel Gonzalez has gone to the medical centre for checks after a fast accident at the end of the session, while Jake Dixon was fastest.
MotoGP next.
Good morning and welcome to Crash.net's live coverage of Friday practice at the Australian MotoGP.
The Moto2 class are just finishing their opening session of the weekend, with MotoGP FP1 starting in 15mins.