The 25-year-old German, four points behind Ferrari's Fernando Alonso with five races remaining, set the fastest lap of one minute 38.832 seconds on a clear and sunny afternoon.
Australian team mate Mark Webber, who joined Vettel on the front row in Japan last Sunday for a race that the German won from pole, was a mere 0.032 slower after being third in the morning.
Spaniard Alonso was third quickest in the second session, 0.328 off Vettel's pace but with a car that could just have the edge on the long runs in a hot race that is likely to be a two-stopper for most.
"We can be quite happy, but I think it looks extremely tight," said Vettel of the relative performance of the top three teams who tested Pirelli's soft and supersoft tyre options over long and short runs.
"All in all, the car felt alright and now we see what we can do for (qualifying) tomorrow. I think we have to improve ourselves to match the others."
McLaren's Lewis Hamilton had kept Alonso off the top in the morning with a best effort of 1:39.148. The 2008 champion was eighth fastest after lunch at the dusty circuit some 400km south of Seoul.
Hamilton needs to deny Vettel, last year's winner in Korea, a third win in a row on Sunday to get back into a title fight that risks turning into a duel between Alonso and the Red Bull champion.
"The Red Bulls seem pretty quick, we will keep pushing. Jenson (Button) was not that far off the pace today and if we get the set-up right and the fuel loads right and everything then maybe we can be competitive," Hamilton said.
Team mate Button was 10th and fourth fastest at a track he described as: "Monza for the first 45 seconds of the lap, then a mid-high-speed section, quite flowing, and then you've got driving around your living room at the end of your lap."
Lotus's Kimi Raikkonen, absent from the first two Korean Grands Prix due to his switch to rallying, had his first taste of the circuit and was 11th and 10th respectively in the two sessions.
The Finn was trying out a new 'Coanda' exhaust system that his team hope will bring big benefits in the closing races as they battle Ferrari for third place in the constructors' standings.
Lotus technical director James Allison expected the team to continue with the system on Saturday.
"I think we're at the beginning of a relatively long road with them. They're not straightforward to make work perfectly first go out but the numbers we're getting from them are good," he said.
With the circuit little used for most of the year, drivers took their time setting fast laps when the first session opened.
Alonso, who was pitched out at the start of last Sunday's Japanese Grand Prix, was an early pace-setter with Hamilton faster towards the finish.
Sauber's Sergio Perez, the Mexican who joins Button at McLaren next year as Hamilton's replacement, stopped on the track in the afternoon after the halfway mark in the session. The Swiss team said it was an actuator problem and the engine was not damaged.
Finland's Valtteri Bottas took Brazilian Bruno Senna's place for the first session at Williams while French reserve Jules Bianchi came in for Nico Hulkenberg at Force India and was 13th.
Other less familiar faces for the morning were Dutch tester Giedo van der Garde for Russian Vitaly Petrov at Caterham and Spaniard Dani Clos replacing Indian race regular Narain Karthikeyan at HRT.
Seven times world champion Michael Schumacher, retiring at the end of the season, was reprimanded by stewards for impeding both the HRTs in the second session but still set the fifth fastest time for Mercedes.
- Fernando Alonso
- Lewis Hamilton