Shakedown is running a day ahead of its usual Thursday morning slot due to the organisers' decision to move the ceremonial start north to Estoril, after which the crews will tackle the event-opening superspecial stage in Lisbon.
Latvala's time of 3m05.2s through the 2.26-mile stage was 0.8 seconds faster than his nearest rival Henning Solberg.
Solberg's effort was impressive as this is his first gravel outing in a World Rally Car since the 2011 Rally GB.
Rally of Portugal seeks new location
The Norwegian returnee, whose 2014 World Rallycross drive with Eklund Motorsport was also announced on shakedown day, is running Pirellis on his Ford.
Latvala's team-mate and last year's Portugal winner Sebastien Ogier was third fastest with Dani Sordo's Hyundai fourth.
All except Solberg in the top four took advantage of a new regulation that dictated that they only had to complete a minimum of two - rather than four - runs at the shakedown test.
Most drivers were running a soft tyre to suit the still-damp conditions, but they were aware that they only have four sets of softs to last the event.
Mikko Hirvonen ran the harder Michelin on his M-Sport Ford, softening the set-up in an effort to get more traction from the tyres. The Finn was fifth fastest and one of three drivers within three tenths of a second: Hyundai men Juho Hanninen and Thierry Neuville were right behind him.
Robert Kubica was eighth fastest in his Fiesta with Mads Ostberg and Andreas Mikkelsen rounding out the top 10.
Britons Kris Meeke and Elfyn Evans were 12th and 14th respectively.
Follow the Rally of Portugal as it happens on AUTOSPORT Race Centre Live from 10am UK time on Friday April 4
Ogier takes dominant Portugal win
Ogier increases lead in Portugal