Reigning world champion Hamilton – who also topped the first practice time-sheet earlier in the day – was the only driver to break the 1:23s barrier with a quickest time of 1:23.931.
As the Briton himself predicted the previous day, Red Bull produced some encouraging runs and were close behind.
Max Verstappen was just over a tenth of a second slower than Hamilton and closely rivalled the 33-year-old’s race simulation runs.
But Hamilton’s rival and fellow four-time champion Sebastian Vettel struggled somewhat, finishing half a second slower and ending in fifth overall, behind team-mate Kimi Raikkonen.
Valtteri Bottas came third in the other Mercedes.
Mercedes and Red Bull both averaged high 1:28s laps, with Ferrari slightly behind with low 1:29s runs – suggesting there could be a close battle at the front of the grid in Melbourne this weekend.
Bottas and Raikkonen will see the stewards after the race following an incident which saw the Mercedes driver take a trip through the gravel to avoid running into the back of his fellow Finn.
Daniel Ricciardo finished seventh and was cruelly denied a chance to rival team-mate Verstappen’s time by a red flag.
The Australian set a personal best in sector one on ultrsoft tyres, slightly faster than the Dutchman, but loose timing wire on the start finish line forced him to abandon the lap.
After a disappointing first session, McLaren improved with Fernando Alonso in eighth. He and Ricciardo finished behind an impressive Romain Grosjean in the Haas, who was less than half a second behind title challengers Ferrari.
The third and final practice sessions gets underway at 3am UK time on Saturday morning, with qualifying then following from 6am.
Rain is expected at Albert Park, which could drastically change the make-up of the field.
