Hamilton's lap time of 1:38.051 was almost half a second quicker than the nearest challenger, the Red Bull of Sebastian Vettel.
But the times were a limited indication of true pace, with none of the top drivers straying from the hard compound tyres.
Most drivers ran medium or long stints in order for their teams to gather data, with rain threatening to scupper testing plans in the second session.
One man who did not manage quite so much running was Australian Grand Prix winner Jenson Button, whose car developed an oil leak late on and left him down in ninth in the standings.
The Mercedes duo of Nico Rosberg and Michael Schumacher took third and fourth places, while Mark Webber's Red Bull was sandwiched by the Lotuses of Romain Grosjean and Kimi Raikkonen in sixth.
Both Force India drivers finished in the top 10, with Scot Paul Di Resta following his point in Melbourne with a solid eighth in practice.
Williams driver Bruno Senna was forced to sit out the session so that test driver Valtteri Bottas could get some track time, and the Finn responded by beating his team-mate Pastor Maldonado and taking 11th place.
Ferrari's woes continued, with Felipe Massa an uninspired 13th, and Fernando Alonso two places further back, having had to wait in the garage for much of the first half of the session as engineers fitted a new nosecone to his car.
Several drivers complained of grip problems, and rear tyres appeared to wear quickly. Numerous racers, Hamilton included, locked the wheels into the opening corner, while turns five, 13/14 all saw drivers almost lose the back end of the car.
But with afternoon showers a distinct possibility according to the weather forecasts, it may be as much of an opportunity to test out dry race set-ups and tyre wear as the teams get.