Rubens Barrichello was 0.128 slower than Montoya in second place, while Schumacher was third with 1:20.784.
Formula One world champion Lewis Hamilton took pole for Mercedes at the season-opening Australian Grand Prix.
The Formula One season starts in Australia on March 17 with new regulations, changed lineups, a trio of young rookies fresh from Formula Two and the comeback of Poland's Robert Kubica.
Germany's Nico Rosberg won the Brazilian Grand Prix on Sunday to end team mate Lewis Hamilton's run of five successive victories and cut the Briton's championship lead to 17 points with one race remaining.
Lewis Hamilton managed to make the most of the adverse conditions to take pole position for Sunday's race.
The German world champion now has 82 points to second-placed Montoya's 79.
Formula One said a tribute was in the works, with details to be confirmed. A minute's silence is likely before the race.
Britain's Sun newspaper reported that Ralf was on the verge of signing a five-year deal with the Japanese manufacturer.
"I think he is in the perfect position. Honestly, he has a strong car, they're very quick, very consistent," Schumacher said.
Nico Hulkenberg delivered a superb qualifying session in his home race as he secured a season-best fifth position on the grid while Paul di Resta was ninth as Sahara Force India got itself in a good position to score some points from the German Grand Prix on Sunday.
Montreal-born Lance Stroll, who celebrated his 18th birthday on October 29 and has yet to pass his driving test, will be the first Canadian F1 racer since 1997 world champion Jacques Villeneuve, who won his title at Williams and retired in 2006.
Lewis Hamilton was 'shocked' with the pace of Mercedes after notching a record-extending eighth pole position at the Australian Grand Prix ahead of team mate Valtteri Bottas as they thrashed their Formula One rivals in qualifying on Saturday.
Unlike the Australian GP, where the majority of drivers carried out only one pit-stop, of Sunday's second race of the season, at Sepang, Malaysia, will see at least two, says Raja Sen.
World champion Nico Rosberg's retirement announcement on Friday came as a complete surprise even to the man who knows most of Formula One's best-kept secrets, commercial supremo Bernie Ecclestone.
Lewis Hamilton took a huge stride towards a fourth Formula One title on Sunday with victory in an incident-packed Singapore Grand Prix after Ferrari title rival Sebastian Vettel crashed out at the start.
Formula One world champion Lewis Hamilton won the Canadian Grand Prix on Sunday in a Mercedes one-two with title rival Nico Rosberg.
The pole was Hamilton's ninth in 10 races this season, the 47th of his career and left the Briton perfectly placed for a fifth career win at the Hungaroring.
Ferrari's six-times world champion Michael Schumacher starts Sunday's Canadian Grand Prix on the third row in sixth place.
All that you wanted to know about the European Grand Prix.
Formula One world champion Lewis Hamilton took his 10th pole in 11 races on Saturday with Mercedes team mate Nico Rosberg qualifying second on the Belgian Grand Prix grid.
Lewis Hamilton celebrated his 50th Formula One victory on Sunday with a pole-to-flag U.S. Grand Prix drive that kept his title hopes alive and trimmed Mercedes team mate Nico Rosberg's lead to 26 points with three races remaining. Rosberg, who had been chasing his 10th triumph of the season, finished second on a sunny Texan afternoon with a big crowd but little drama -- even if Hamilton spent much of it worrying about reliability. The straightforward victory was Hamilton's fourth in Texas in five seasons and ended a barren stretch for the triple world champion dating back to his last win in Germany in July.
It was the second win of Montoya's 41 race career and the first of the season for BMW-powered Williams
Lewis Hamilton and Sebastian Vettel battle to match the late Argentine's 1950s feat of five world championships.
The Williams driver says he will be fit for next week's Italian Grand Prix after a big crash at Monza.
Germany's Nico Rosberg romped to his fifth win in a row for Mercedes on Sunday and ended Formula One champion team mate Lewis Hamilton's hopes of a third successive Bahrain Grand Prix victory.
The Briton eased his Mercedes across the line 6.2 seconds ahead of Ferrari's Sebastian Vettel, with Max Verstappen, who started 16th, finishing a surprise third for Red Bull.
Quadruple Formula One world champion Sebastian Vettel went for five on Friday with the German choosing to have that numeral on his car when he is eventually deposed as number one.
Adrian Sutil will start eighth at the grid while his Force India Formula One team-mate Vitantonio Liuzzi will be at the 12th spot in the Belgian Grand Prix on Sunday.
The last time Kimi Raikkonen stood on top of a Formula One podium, Lewis Hamilton had just joined Mercedes with one championship to his name and Sebastian Vettel was riding high with Red Bull.
Perez, who started eighth on the grid, finished ninth after being passed by Kevin Magnussen towards the end of the 56-lap race.
Ferrari's Sebastian Vettel was fastest in Formula One's pre-season testing at a chilly Circuit de Catalunya on Tuesday while Mercedes rival Lewis Hamilton took one for the team and "sacrificed" his scheduled stint.
Events in Europe could reshape the F1 championship before teams regroup in China next week. The focus is on the International Automobile Federation and an appeal court hearing scheduled for Paris on April 14 that will make a definitive ruling on the sport's diffuser controversy. If the protesting teams -- BMW-Sauber, Ferrari, Red Bull and Renault -- succeed in overturning stewards' decisions from Australia and Malaysia, then Brawn GP, Toyota and Williams will be reined in.
Formula One world championship leader Sebastian Vettel won the Bahrain Grand Prix for Ferrari on Sunday in the German's 200th race start.
A prototype 'halo' head protection device made its Formula One test debut in Spain on Thursday, with Kimi Raikkonen declaring visibility to be 'okay' after lapping with it attached to the cockpit of his Ferrari.
Rubens Barrichello had no luck in his 300th grand Formula One Grand Prix on Sunday, with the Brazilian retiring on the first lap after a collision with Ferrari's Fernando Alonso.
Formula One legend Michael Schumacher had reportedly "reacted with his mouth" during a secret visit to the Grenoble hospital by his former Ferrari teammate Felipe Massa.