The German, a two-time winner in Japan, moved to the top of the times in the dying seconds, outpacing team-mate Mark Webber to secure a Red Bull one-two ahead of qualifying.
Ferrari's Felipe Massa was third quickest, albeit over half a second off Vettel's pace, with Michael Schumacher fourth in the Mercedes and Sergio Perez fifth in the Sauber ahead of team-mate Kamui Kobayashi.
The McLarens of Jenson Button and Lewis Hamilton wound up eighth and 13th respectively, but both men were hindered by traffic on their final flying laps. Championship leader Fernando Alonso was 11th fastest.
The day welcomed the drivers with a clear sky and high temperatures, the circuit reaching 36 degrees Celsius ahead of the start of the 60 minutes.
Nico Rosberg set the early benchmark seven minutes into the session with a lap of 1m43.4s, the German posting the first proper laptime on his next round with a 1m35.1s.
Team-mate Schumacher was the next man to complete a full lap, going quicker than Rosberg by nearly a second to take the top spot 10 minutes in.
Schumacher's time remained unbeaten for some 10 minutes before Pastor Maldonado became the first driver to lap in the 1m33s 20 minutes into the session.
Button moved to the top of the times just a minute after that in the McLaren, posting a 1m33.6s, but his time was bettered by 0.052 seconds an instant later by his team-mate Hamilton, despite the Briton locking up his front left tyre at the hairpin.
Hamilton stayed on top until Vettel completed his first flying lap, the Red Bull driver going quickest by over three tenths of a second when the session was about to reach the halfway point.
Nico Hulkenberg's day came to an early finish with 20 minutes to go after the German lost the rear of his car at the second Degner curve, crashing into the barriers and damaging the front wing and the front left corner.
It was the second accident for Force India this weekend after team-mate Paul di Resta damaged his car on Friday afternoon.
After the track was cleared, Schumacher was the first driver to try the soft Pirelli tyres to move into first place with 15 minutes left. Vettel improved his time moments later despite running on used, harder rubber, although it was not enough to relegate his compatriot.
Kimi Raikkonen, who had a troubled practice on Friday, seemed to have problems again this morning, the Finn not posting a time until the 45-minute mark as he struggled with his car's handling. He finished down in 12th.
With six minutes left, Button kicked off the final rush to try the softer rubber, the McLaren driver having to abort his first lap after finding a slow Schumacher at the 130R corner.
Hamilton was also unable to complete a proper flyer after a big scare when the Briton found Marussia's Charles Pic cruising ahead of the final chicane as he came flying out of 130R.
Webber did finish his lap a minute later to move into first with a lap of 1m32.371s, as Vettel went second quickest, also using the soft tyres, the German finding traffic on his lap.
Vettel went for another lap and outpaced his team-mate by 0.235s to secure the fastest time as the chequered flag dropped.
Apart from Hulkenberg, the man in the most trouble was HRT's Narain Karthikeyan, who damaged his car's new floor when going off track. He missed part of the session as the team worked on it.
- Michael Schumacher