The German, embarking on his quest for a fourth successive world title, steered the car he has nicknamed 'Hungry Heidi' around the Melbourne street circuit in one minute 25.908 seconds half an hour before the end of the second session.
That lap topped the time sheets for the day, edging his Australian team mate Mark Webber (1.26.172) into second place as the Red Bull team scattered a few seeds of doubt over the consensus that the gap to the rest of the grid was narrowing.
Nico Rosberg (1.26.322) was best of the rest on what would have been an encouraging day for Mercedes had he not later ground to a halt just moments after his team mate Lewis Hamilton had driven over the gravel and into a wall.
Former world champion Kimi Raikkonen and Romain Grosjean grabbed the fourth and fifth best times to confirm some impressive showings for Lotus in pre-season testing.
Twice world champion Fernando Alonso and his team mate Felipe Massa had more competitive first than second sessions for Ferrari, finishing sixth and eighth fastest overall to sandwich the unfortunate Hamilton.
Hamilton had started brightly on a warm and sunny day at Albert Park and finished fourth quickest in the first session but faced the lonely walk back to the paddock after his crash just seven minutes from the end of the second.
German Adrian Sutil made an excellent start on his return to Force India after a year out of the sport by setting the ninth quickest time overall, outperforming not only his team mate Paul Di Resta but also both McLarens.
Jenson Button, who has won three of the last four Australian Grands Prix, only managed the 11th fastest time - 2.386 seconds off the pace - with his new team mate, Mexican Sergio Perez, lapped 13th quickest.
Out of the five rookie drivers Dutchman Giedo van der Garde had the worst of it, banking his Caterham on the trackside gravel at Turn 3 with an hour remaining of the session.
A third practice session takes place on Saturday before qualifying for Sunday's race.
|1||Sebastian Vettel||Red Bull||1:25.908||33|
|2||Mark Webber||Red Bull||1:26.172||0.264||31|
|9||Adrian Sutil||Force India||1:27.435||1.527||35|
|12||Paul di Resta||Force India||1:28.311||2.403||37|
|14||Daniel Ricciardo||Toro Rosso||1:28.627||2.719||31|
|17||Jean-Eric Vergne||Toro Rosso||1:28.968||3.060||36|
|22||Giedo van der Garde||Caterham||1:32.450||6.542||11|