The 2008 world champion, chasing his first win for Mercedes after leaving McLaren last year, started the session with a wave for the crowd from the pit wall and ended it with the fans saluting a near perfect lap.
"Storming job there, Lewis, storming job," the team told him over the radio after the fastest lap at the circuit since it was remodelled in 2010.
Red Bull's triple world champion Sebastian Vettel qualified third and will share the second row with team mate Mark Webber, in what will be the Australian's last British race before quitting Formula One at the end of the year.
The pole was the 28th of Hamilton's career, and Mercedes' fifth in eight races, and his first at Silverstone since his 2007 debut season.
"The crowd do make a huge difference...I come here with an extra boost of energy. I just want to pay them back," said Hamilton, who won his home race in 2008.
"That was a lap for them," said the Briton, who jumped out of his car after parking up in the pit lane and stood arms outstretched to applause from the grandstands.
"They are bloody quick in qualifying...they seem to be in a different world on Saturday afternoons," said Vettel, who is 36 points clear of Ferrari's Fernando Alonso at the top of the standings.
"But points are scored on Sunday and the last few races have been pretty good for us."
Hamilton agreed the Red Bulls posed the main danger, despite Mercedes' third front row lockout in four races.
"Undoubtedly it's going to be tough for us to keep Sebastian behind but our long run pace wasn't as bad as we've seen in the past, so I'm hoping with the temperatures and a bit of care, we can nurture the tyres to get a good result," he said.
Britain's Paul Di Resta qualified a career best fifth for Force India but was subsequently excluded from the results and demoted to the back of the grid after a post-qualifying check found the car was underweight by 1.5kg.
The team ruled out an appeal after initially questioning the accuracy of the apparatus. They said the problem was with the driver's weight, not the car.
That promoted young Australian Daniel Ricciardo, the Toro Rosso driver bidding for Webber's drive next year against team mate Jean-Eric Vergne and Lotus's Kimi Raikkonen, to fifth with Force India's Adrian Sutil sixth.
Alonso will start ninth in a disappointing performance from the Italian team, who had Brazilian Felipe Massa in 11th place.
"We were not competitive all weekend and it's not normal to see Ferrari out of Q3 (the third phase of qualifying)," said the Spaniard, who said it had been the worst Saturday of the season so far.
"We need to recover now and it was a bad Saturday. We didn't improve the car enough in the last four to five races and we ordered some new parts but they didn't do what we expected. We need to keep on working."
McLaren had another miserable qualifying, with 2009 world champion Jenson Button starting 10th and Mexican team mate Sergio Perez 13th.
Former champions Williams, who have made their home race a celebration of their 600 Grands Prix in the sport, fared even more dismally.
Finland's Valtteri Bottas failed to make it through the first phase and will start 16th, behind Venezuelan team mate Pastor Maldonado in 15th, after Di Resta's penalty is taken into account.