Vettel cemented his status as the number one rival to Hamilton and his all-conquering Mercedes team by virtue of winning the season-opening race in Australia a fortnight ago.
And the two title protagonists went up against each other again at the Shanghai International Circuit in a pulsating qualifying session, with Hamilton winning the battle to ensure he will start from the very front while Vettel is in second and his Mercedes team-mate Valtteri Bottas third.
Daniel Ricciardo is fifth for Red Bull with Felipe Massa starting sixth in his Williams.
After the weather farce of Friday, in which second practice was abandoned without one driver completing a single lap, blue skies ensured the cars roared back into life on a dry track on Saturday.
And while rain is still forecast to play a role in tomorrow's race it is Hamilton who will lead the pack off for the second race in a row.
The 32-year-old triple world champion, who is closing in on Michael Schumacher's all-time pole record, set the fastest lap ever seen in Shanghai to beat Vettel to pole by 0.183 seconds. Bottas was just one thousandths of a second slower than the Ferrari man. Kimi Raikkonen lines up in fourth.
Hamilton got out of his car and climbed aboard the scaffolding adorning the pit straight to pump his fist and salute his large legion of Chinese fans in the main grandstand - many of whom were waving Union Jacks.
Hamilton's former team-mate Fernando Alonso predicted a gloomy outcome for his McLaren team this weekend, and the Spaniard declared that he was "driving like an animal" to haul his car into the second part of qualifying.
But that is where it would end for the double world champion, who will start 13th on Sunday. His rookie team-mate Stoffel Vandoorne failed to progress from Q1 and lines up in 16th.
Antonio Giovinazzi impressed on his last-minute call-up to replace the unfit Pascal Wehrlein in Melbourne, but the Italian was brought back down to earth here after he crashed out.
The 22-year-old lost control of his Sauber as he exited the final corner before smashing into the tyre barrier on the opposite side of the track.
Giovinazzi walked away from the incident but his car was not so fortunate, with bits of Sauber debris littering the pit straight.
The crash, in the final moments of Q1, scuppered a number of drivers on their final runs. with Britain's Jolyon Palmer falling at the first hurdle of qualifying for the second race in a row.
"I was miles up on where I was so I think my lap was enough for Q2," Palmer said. "I couldn't believe it because the car has been feeling good this weekend."
Palmer, who was only 18th of the 20 runners, is also under investigation by the stewards for failing to slow sufficiently for the yellow flags deployed after Givoinazzi's crash.
"I lost a second in the final sector," Palmer added. "If they look at the data I think they will see I was cruising across the line."
Max Verstappen will start one place behind Palmer after his day was thwarted by a problem with the Renault engine in his Red Bull.