With damp patches around the 8.9-mile course, Dunlop – second fastest in the Superbike and Supersport sessions – set the fastest lap at 117.402mph, which put him 1.7s ahead of 14-time winner Michael Rutter on the Bathams BMW.
It was a strong start to race week for the 33-year-old, who finalised a late deal to ride a Hawk Racing Suzuki Superbike after splitting from Paul Bird's Ducati team.
Richard Cooper continued to impress as he went third fastest on the Buildbase Suzuki (115.273mph), five seconds down on Dunlop’s time.
Dominic Herbertson had a strong ride on the GB Racing BMW as he completed the session in fourth, while Ian Hutchinson (Milwaukee BMW) and James Hillier (OMG Yamaha) were the top six.
Craig Neve (CN Racing BMW) was seventh ahead of Honda Racing’s Glenn Irwin, with John McGuinness (Honda Racing UK) and Alastair Seeley (IFS Yamaha) rounding out the top ten.
1 M Dunlop (Honda) 117.402mph
2 M Rutter (BMW) 116.656mph +1.758
3 R Cooper (Suzuki) 115.273mph +5.078s
4 D Herbertson (Suzuki) 114.929mph +5.918s
5 I Hutchinson (BMW) 114.559mph +6.824s
6 J Hillier (Yamaha) 114.086mph +7.994s