Fellow Briton James Guy qualified sixth fastest also in qualifying for Sunday morning's men's 400m freestyle final at the Olympic Aquatics Stadium.
The World Championship silver-medallist finished fifth in his heat, scraping through to the final. American Conor Dwyer advances to the final fastest, with a time of 3.43.42 ahead of champion in Kazan, Sun Yang of China.
Peaty destroys field in Rio
World champion Peaty was hot favourite as world no. 1 coming into the event and firmly stamped his mark on the event, finishing over a second ahead of his nearest rival in a time of 57.55.
Three-time gold-medallist in Kazan last August, the Briton powered away from the gun and coasted to victory, to the disbelief of the pool in Brazil. If Peaty goes on to win Monday morning's final, he will be the first British male swimmer to win gold since Adrian Moorehouse in 1988 at the same event.
His great rival Cameron van der Burgh finished down in 7th fastest ahead of the semi-finals later on Saturday.
Guy struggles as Dwyer qualifies fastest
An heir of controversy hung over the Olympic Aquatics Stadium in Rio, with both Yang and Park Tae-hwan of South Korea competing despite their previous drug bans.
As World Champion from Kazan last August, the Chinese was the hot favourite and began his heat in appropriate fashion, going on to win with a typically powerful showing, powering away from Connor Jaeger and Canada's Ryan Cochrane - who failed to qualify.
In a slow heat however, the seventh draw looked on with optimism. A packed line-up saw Horton, Guy, Dwyer and Australian David McKeon vie for a spot.
Guy led the field to 150, but on the turn the Brit began to struggle. Hugely unfancied Italian Gabriele Detti, broke away from the pack with Dwyer and Horton leaving Guy scrambling. The Brit however advances to the final at 2.30am UK time.
In a stacked field, Guy will need to clear the early cobwebs of the morning if he is to storm back for a medal later on.