Starting from pole at the Red Bull Ring, Bagnaia fended off the fast-starting KTM duo of Brad Binder and Jack Miller on the run to Turn 1 to take the holeshot.
Quickly pulling a gap to Binder in second, Bagnaia on his factory Ducati increasingly came under less threat as the 14-lap contest ticked away, getting to the chequered flag 2.056s clear for his fourth sprint win.
Bagnaia’s sprint victory now puts him 46 points ahead in the championship over Martin, with Marco Bezzecchi 59 adrift.
Binder was second while Pramac’s Martin completed the podium, but is currently under investigation for triggering chaos at Turn 1 on the opening lap.
Left in 12th after having multiple laps deleted in qualifying for exceeding track limits, Martin came charging into Turn 1 looking to make up ground.
But he nudged Yamaha’s Fabio Quartararo as the field bunched into the first right-hander, which sent the Frenchman into the side of the slow-starting Aprilia of Maverick Vinales.
This all led to Martin’s team-mate Johann Zarco, VR46 Ducati’s Marco Bezzecchi and RNF Aprilia’s Miguel Oliveira crashing out, while Quartararo, Vinales and Ducati’s Enea Bastianini were forced to pick their way through the chaos and tumbled down the order.
This incident is currently under investigation by the stewards.
At the end of the opening lap, Bagnaia and Binder were already starting to drop Miller, who was a second adrift come the end of the second tour.
Miller soon came under threat from VR46’s Luca Marini and Martin, with the former picking his way through into Turn 1 on lap six.
Martin was gifted fourth when KTM’s Miller ran wide under braking for Turn 3 moments later.
Martin piled pressure on Marini and launched a move into the Turn 2 chicane on the next lap, but made contact with the VR46 rider as he carved up the inside.
Marini crashed out and Martin was placed under investigation again, but avoided a penalty for that particular incident.
This left him to finish a distant third from Binder and Bagnaia ahead, while Gresini’s Alex Marquez took fourth from Miller.
Pol Espargaro was sixth on the Tech3 KTM in a heroic ride from 13th, edging out brother Aleix Espargaro on the factory Aprilia by 0.144s at the chequered flag.
Vinales recovered to eighth after his Turn 1 chaos involvement having started second, while Franco Morbidelli took the final sprint point on his Yamaha away from Honda’s Marc Marquez, who leaped up from 18th on the grid.
Bastianini was 13th behind Joan Mir (Honda) and Gresini’s Fabio Di Giannantonio, while Raul Fernandez was 15th on the RNF Aprilia ahead of Quartararo.
Quartararo was involved in a touch with Aprilia wildcard Lorenzo Savadori at Turn 4 on lap six, which resulted in the Yamaha rider being given a long lap penalty.
LCR stand-in Iker Lecuona was 16th from Augusto Fernandez, who also got slapped with a long lap penalty for exceeding track limits too many times.
Zarco re-joined the race after the Turn 1 incident but retired late on, while Takaaki Nakagami was taken to the medical centre for checks on his foot after taking a tumble on lap three.
