The 24-year-old, second fastest in the morning session, made the most of the warmer weather conditions and clocked a fastest lap time of 1min 39.334sec, edging out fellow German Nico Hulkenberg of Force India by one tenth of a second.
As in the overcast morning session, drivers continued to lock up their brakes early on as teams struggled to find the right brake balance to deal with the demands of the Valencia street circuit.
As the sun began to shine and the track temperature continued to rise midway through the session, Ferrari driver Spaniard Fernando Alonso went fastest before his fellow countryman Pedro de la Rosa of Hispania held up proceedings by crashing into the barrier at turn 14.
As soon as the track was clear, defending drivers’ champion Vettel, who has won both the previous races in Valencia, clocked his fastest time approaching the hour mark.
Despite a flurry of efforts from other drivers, Hulkenberg came closest to matching the German’s time before drivers changed setup and began testing under heavier fuel loads.