Denmark's powerhouse quartet of Lasse Norman Hansen, Julius Johansen, Frederik Madsen and Rasmus Pedersen scorched around the wooden boards, completing the 4,000m distance in 3:46.579.
Australia, who had held the world record with 3:48.012, could manage only fifth fastest with 3:50.015.
Britain, with veteran Ed Clancy going for a sixth world title in the discipline, were seventh in 3:50.341, fractionally slower than the time they rode to break the world record en route to gold at the Rio Olympics in 2016.
It backed up Clancy's pre-event claim that the team pursuit has evolved into a more speed-heavy discipline and while Britain will have new aerodynamic bikes and kit in Tokyo, they now know exactly how high the bar has been raised.
Australia's quartet, missing injured Kelland O'Brien who was part of their 2019 world record-breaking team, were only fifth fastest in the qualification races. Britain were seventh.
Denmark, New Zealand, France and Italy were the four fastest teams and will contest the gold and silver medals when the first round begins later on Wednesday.
Australia and Britain will be left scrapping for bronze.
Australia's women's team were also fifth-fastest in qualification, meaning they too cannot go for gold.
Britain, missing Laura Kenny, were second-quickest behind the United States whose road time trial world champion Chloe Dygert powered her team around the Berlin velodrome.
Katie Archibald, Elinor Barker, Eleanor Dickinson and Neah Evans compete in the Women's Team Pursuit qualifying at the UCI track cycling World Championship in Berlin on February 26, 2020.
Image credit: Getty Images
The Netherlands broke the world record, logging a time of 41.225 to take the gold in the men's team sprint, beating Great Britain back into second place.
Netherlands smash their own world record and beat Great Britain in final