The Australian, who had boasted before the Games that he would win gold medals in the blue-riband sprint but finished only fourth in the relay, was in better form in Tuesday's heats.
He finished second in his morning heat and fourth overall after cruising through two laps of London's Aquatics Centre in 48.38 seconds.
I think this morning was a positive sign. I felt I did quite a good swim," he said. "I think I can get it quite a lot faster tonight.
"So I just got to stay relaxed. When I'm relaxed is ultimately when I get the results."
Nathan Adrian, who won a silver medal for the United States in Sunday's relay after beating Magnussen in the lead-off leg, was fastest overall, posting a time of 48.19, just ahead of ahead of South Africa's Gideon Louw and Sebastiaan Verschuren of the Netherlands.
Brazilian world record holder Cesar Cielo was 10th overall, while Yannick Agnel, who anchored the French 4x100 freestyle relay team to gold and won the individual 200 title, was 12th equal.
The top 16 qualified for Tuesday night's semi-finals, from which the eighth best will advance to Wednesday's final.
Magnussen was the overwhelming favourite to win gold before the Games after winning the world title last year but said his below-par showing in the relay had given his opponent's a boost.
"It hurt my pride as much as anything the other night," he said.
"A lot of my competitors have never seen me lose or sort of falter at a moment like that. I reckon they probably think they can beat me right now but I'm going to fight for this one."
American Kathleen Hersey outpaced Chinese world champion Jiao Liuyang to top the qualifiers for the women's 200 metres butterfly.
The 22-year-old Hersey plowed her way through four laps of the Aquatics Centre in a time of two minutes, 06.41 seconds to advance to the semi-finals as the top seed.
Jiao easily won her heat in 2:07.15 to finish second overall while Britain's Jemma Lowe was third fastest.
China's Liu Zige, the reigning world record holder, was 11th overall but Britain's Ellen Gandy, a silver medallist at last year's World Championships, missed out on the semi-finals after finishing 17th.
Only the top 16 advanced to Tuesday's semi-finals, from which the eight fastest will move through to Wednesday's final.
Japan's Kosuke Kitajima eased his way into the semi-finals of the men's 200 metres breaststroke to stay on course for one last crack at winning a fifth gold medal.
Kitajima won the breaststroke double at Athens in 2004 and Beijing four years later and is locked in a race with Michael Phelps to become the first male swimmer to win the same individual event at three Olympics.
He missed the podium altogether in the 100 final but gets another chance in the 200 after finishing second in his heat and fifth overall in a time of two minutes, 09.43 seconds.
Hungary's Daniel Gyurta, the world champion in 2009 and 2011, set the fastest time of 2:08.71 just ahead of British duo Michael Jamieson (2:08.98) and Andrew Willis (2:09.33).
Barring a major upset or calamity, Michael Phelps will claim one of the few records that he has not yet captured at the London Olympics.
Phelps did not swim in the morning heats but his American team mates ensured he would be in action in the evening finals for two events when they set the fastest time in the 4x200 metres freestyle heats.
The quartet of Charlie Houchin, Matthew McLean, Davis Tarwater and Conor Dwyer posted a combined time of seven minutes 06.75 seconds, nearly three seconds faster than any other country.
Teams normally rest their best swimmers in the relay heats, meaning the Americans will be much faster in the final when Phelps and 400 individual medley winner Ryan Lochte join forces.
Phelps is also in the 200 butterfly final on Tuesday night. If he medals in both events, as expected, he will overtake Soviet gymnast Larisa Latynina's record tally of 18 Olympic medals.
- Michael Phelps