Mercedes have been looking competitive over a single lap at Sepang for the entire weekend so far. AFP
Vettel's team-mate Mark Webber timed third ahead of 2007 world champion Kimi Raikkonen, who was wearing smoke-damaged race gear after a fire gutted the Lotus suite and destroyed his spare helmet.
Finland's Raikkonen, back in Formula One after two years as a rally driver, was already at a disadvantage this weekend after he was penalised five grid places for a change of gearbox.
Stablemate Romain Grosjean was fifth ahead of McLaren's Jenson Button, who won last week's season-opener in Australia, Williams driver Pastor Maldonado, Michael Schumacher and Lewis Hamilton, whose 1:38.021 led Friday's timings.
In relatively cool, overcast conditions, Fernando Alonso was the quicker of the two Ferraris in 13th while his team-mate Felipe Massa, forced on to the defensive over suggestions he could be axed this year, was 18th.
Weather forecasts showed a strong danger of heavy rain around the time of qualifying for Sunday's race, which starts at 4pm (0800 GMT).