The Mercedes-powered Aston Martin team also enjoyed a much-improved session, with Lance Stroll and Sebastian Vettel – while more than half a second off the leading time – running impressively in fourth and fifth.
The Yuki Tsunoda-led AlphaTauris were sixth and seventh, while Fernando Alonso – back in the car after sitting out for debutant Guanyu Zhou in the earlier session – finished eighth.
McLaren’s in-form Brit Norris and Alfa Romeo’s Antonio Giovinazzi rounded off the top-10, which surprisingly didn’t include Sergio Perez in the other Red Bull or the Ferraris.
Perez was 11th while Carlos Sainz and Charles Leclerc, who were third and second in first practice, finished 13th and 16th to end Friday’s running.
Despite topping the session, Hamilton, who felt Red Bull had a 0.2s advantage throughout last weekend, believes Mercedes haven’t quite made enough improvements to reel in their rivals.
“They’ve definitely got something extra in their bag, I already know that,” said Hamilton.
“I think we’ve made some small progress today but I think they still have two tenths, or maybe it’s a tenth and a half. We’ve definitely made some small steps forward but not enough to close that two-tenths.”
Hamilton also admitted that his lack of pace in first practice was down to the changes planned on the back of his simulator session this week, before switching back to a setup similar to the Styrian GP in P2.
“I’m generally happy with where the car is,” he added. “I’m not going to change too much because most often if it ain’t broke don’t fix it, and if you try to eek out more it gets worse. So I’ll be doing the tiniest of tweaks.”
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Unsurprisingly, Verstappen pumped up Mercedes as having made improvements.
“I think it will be tight,” said the Dutchman, who holds an 18-point lead in the championship. “They definitely have improved a bit, but we’ll see tomorrow in qualifying.
“They seemed quite quick on that soft compound. I think from our side it wasn’t perfect on that run but nevertheless I felt good in the car. There are no real problems, we just have to make sure we have more pace on the soft because on the mediums we looked good and also on the long runs we looked decent.”