The German was 1.3 seconds in front of Felipe Massa in the Ferrari on a day affected by a midday shower, as all the current 2009 machinery came together.
Massa was conducting set-up work but he lost some track time following an off-track excursion in the early afternoon.
Toyota marked their return to European testing, following two weeks in Bahrain, with test driver Kumui Kobayashi setting the third best time as he focused on aerodynamic evaluation work.
"This morning was my first real chance to try out the TF109 in dry conditions," said the Japanese. "From the first run the car felt easy to drive so we were able to get straight into our programme of aero work. It certainly feels like a step forward from last year.
"The shower interrupted our afternoon but we still made it through our programme. Overall it went well so this was a good day of testing for us."
Nico Rosberg was fourth fastest for Williams, ahead of Robert Kubica in the BMW Sauber and Giancarlo Fisichella in the new Force India.
Kubica started the day evaluating 2010 tyre designs for Bridgestone, with the rubber characteristics set to change next year to help car balance.
But having lost track time with an engine change in the morning, and only getting onto 2009 work following the lunchtime rain, Kubica switched his focus to race starts for the remainder of the day.
Pedro de la Rosa was seventh fastest in the McLaren, with Nelson Piquet ending the day at the bottom of the timesheets in the Renault R29 after suffering a few reliability problems.
"We had a few issues with the car today which limited our mileage, but we still managed to evaluate some of the new parts we brought to this test," said the Brazilian. "The track was improving throughout the day as we had a lot of cars running and so it should get better and better throughout the week.
"Looking ahead to tomorrow, the priority is to get more miles under our belt - the weather should be similar so hopefully we will get another dry day."
Today's testing times:
Pos Driver Team Time Laps
1. Vettel Red Bull (B) 1:19.055 87
2. Massa Ferrari (B) 1:20.330 63
3. Kobayashi Toyota (B) 1:20.699 79
4. Rosberg Williams (B) 1:21.171 71
5. Kubica BMW Sauber (B) 1:21.292 47
6. Fisichella Force India (B) 1:21.584 31
7. de la Rosa McLaren (B) 1:21.831 94
8. Piquet Renault (B) 1:22.011 52
SOURCE: Autosport
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