New ball seamer Bailey was superb with three for six in 14 overs as Yorkshire were bowled out for 159 at tea in front of Emirates Old Trafford’s first first-team crowd for 617 days (approximately 2,000).
Yorkshire slumped to 40 for seven before lunch only for 19-year-old wicketkeeper Harry Duke to add respectability with a composed 52 off 120 balls in his second first-class appearance.
But opener Davies hit eight fours in 57 balls as Lancashire ended day one in total control at 95 for one from 31 overs in this fixture between Group Three’s top two sides.
Lancashire started with a three-point advantage after six games and are chasing a first Championship Roses win here since 2000.
Despite winning the toss for the sixth game in seven, Yorkshire were hurt by the late omission of linchpin batsman Gary Ballance due to a calf injury.
They were already without Joe Root and had to draft in inexperienced Will Fraine and George Hill.
Fraine was caught behind for a duck by a Saqib Mahmood beauty but other pre-lunch dismissals were avoidable.
Adam Lyth was caught in the gully driving at Bailey, Harry Brook was run out from cover having been called through for a quick single by Tom Kohler-Cadmore and Dom Bess was caught in the gully cutting at Luke Wood.
Bailey also had Hill caught at second slip and, just before tea, Duke caught behind down leg pulling.
Lancashire, for whom Luke Wood and Danny Lamb also struck twice, actually let Yorkshire off the hook.
They dropped a handful of catches, including Duke at leg slip as he turned Matthew Parkinson around the corner to secure his 50th run.
He shared 77 for the ninth wicket with Steve Patterson, who made 27, before last pair Ben Coad and Duanne Olivier added 38 from 121 for nine. Coad finished unbeaten on 32.
But home openers Davies and Keaton Jennings put Yorkshire’s batting performance into context in good batting conditions with a stand of 71 inside 19 overs.
Davies reached his fifth 50 of the season off 53 balls before being caught behind down leg off Olivier. Jennings will begin day two on 22.