Warwickshire seamer Chris Woakes claimed 5-63 as Lancashire were bowled out for 247 on the opening day at Old Trafford.
In coach Peter Moores' final match in charge before he joins England, Lancashire chose to bat first but had no answer to Woakes and fellow seamer Keith Barker (3-52).
Opener Paul Horton spent more than four hours making 83 but lacked support from the remainder of the Lancashire line-up, the last six wickets going down for 54 runs.
Warwickshire openers Varun Chopra (29no) and William Porterfield (30no) reached 63-0 in reply at stumps.
At Headingley, Gary Ballance struck a century to power Yorkshire to 328-7 after opting to bat first against Northamptonshire.
Opener Alex Lees initially led the way with 11 fours in his 90 before being trapped lbw by Andrew Hall (3-72).
Ballance, who made his Test debut in Sydney at the turn of the year and could have a big role to play for England this summer, hit 18 fours and a six in his 117 not out - the 20th first-class hundred of his career.
In the other Division One fixture starting on Sunday, defending champions Durham were dismissed for 308 after being sent in by Somerset at Chester-le-Street.
Seamers Lewis Gregory (4-59) and Peter Trego (3-61) did most of the damage, while Durham opener Keaton Jennings top scored with 80.
Somerset closed on 7-0 in reply.