The reigning Commonwealth champion and world silver medallist swam a 4:34.98 minutes time to beat three-time Olympic champion and world record holder Stephanie Rice into second place.
Miley, who took her seventh successive 400m individual medley title at the trials in March, was delighted with her performance in defeating Rice.
"I'm really happy with how that went,” she said, after advancing as the sixth fastest.
“It's the first time I've felt so relaxed in such a big competition.
“Who knows if I can medal? I've just got to swim the race of my life. I can only control what I can do. I can't control how fast other people are going to swim.
"It's good but I know maybe she (Rice) went a little bit slower – that means she's got more in the tank for tonight, who knows?”
Youngster Aimee Willmott went well in the following heat swimming a solid 4:38.87 time that wasn’t quite good enough to join Miley in the final.
Team GB teammate Fran Halsall finished strongly to touch second in 58.23 seconds and secure her place in tonight’s 100m butterfly semi-final and she was in awe of the special atmosphere inside the Olympic Aquatic Centre.
"All I could hear was the crowd going haywire,” she said. “They tried to quieten them down and everyone was still shouting.
“It really made me smile and relax. It was the first swim so I was pretty nervous. It's nice to have that little bit of extra relaxation."
Ellen Gandy, fresh from setting a British record in the same pool at the trials in March, stole second with a great 58.25s swim in to join Halsall in tonight’s semi-finals.
Roberto Pavoni and Joe Roebuck failed to make the men's 400m medley final, where Beijing posterboy Michael Phelps will showdown with arch-rival Ryan Lochte later today.
Roebuck, who will swim in two more individual events at the Games, admitted it was a disappointing performance.
"It wasn't quite the swim I was expecting or hoping for,” said Roebuck. "The stamina wasn't quite there for the 400m."
David Carry, the oldest member of the team, swam a gutsy 400m freestyle to post 3:47.25 to grab a place in the final eight tonight but British record holder Robbie Renwick won't be joining him.
Craig Benson turned in an excellent performance in the 100m breaststroke to clock 1:00.04, qualifying for tonight’s semi-finals alongside Michael Jamieson, who swam 59.89 secs.
Amy Smith, Jessica Lloyd, Caitlin McClatchey and Rebecca Turner finished equal fourth in their heat of the 4x100m freestyle relay.
Their time of 3:38.21 was just about good enough for the team, who qualified equal seventh with Sweden, despite resting Halsall in anticipation of a final berth.
- Stephanie Rice