Ferrari's Formula One championship leader Fernando Alonso, who is 29 points clear of Vettel with six races to go, will start on the third row in sixth place, while Japan's Kamui Kobayashi in a Sauber delighted the home crowd by taking third.
Vettel and Alonso were both called to the stewards afterwards, however, with the German accused of impeding the Spaniard at the last corner in the dying seconds.
Vettel was reprimanded for the incident but not penalised.
His lap of one minute 30.839 denied title rivals McLaren, whose drivers were off the pace anyway, a fifth pole in a row for the season.
Jenson Button was demoted five places for a gearbox change to eighth while McLaren team-mate Lewis Hamilton will start ninth. Frenchman Romain Grosjean (Lotus) will line up in fourth ahead of Mexico's Sergio Perez (Sauber) in fifth.
Vettel's 34th career pole lifted the 25-year-old to third in the all-time list behind seven-times champion and compatriot Michael Schumacher (68) and the late Brazilian Ayrton Senna (65).
"We had a very smooth qualifying session, nearly perfect," said Vettel, who has won two of the last three races at the figure-of-eight circuit overlooked by the giant fairground Ferris wheel.
"I couldn't really ask for more. The car felt fantastic from the start."
Vettel was also helped by Kimi Raikkonen, whose Lotus skidded off right at the finish and brought out yellow flags before others could get in their final quick laps.
"What can I say, other than get angry about being unlucky? The yellow flags came at the worst possible moment, when I was coming into Turn 14," said Alonso.
"Up until then, my lap was great and there was every chance of setting the fourth fastest time of the day, which would have then seen me start from third on the grid."
Button, winner in Japan last year, qualified third but knew even before the weekend that he would have the penalty after a problem was detected in his car's gearbox after the previous Singapore Grand Prix.
"It hurts a little bit having the grid penalty but today was good," said Button, who will start eighth and next to Finland's Kimi Raikkonen in a Lotus.
"It's always great driving around here and it was a lot of fun but we just aren't quick enough and I'm not sure what we can do about that."
Hamilton, the 2008 champion who will replace Schumacher at Mercedes next year, qualified only ninth and was gloomy about Sunday's prospects.
"With the pace that I have, who knows what will happen in the race. Long run pace wasn't bad yesterday but the car ... I'm going to struggle with it tomorrow," said the Briton, who will line up next to old Ferrari foe Felipe Massa.
Schumacher announced his second retirement at Suzuka on Thursday and will start his last Japanese Grand Prix on the back row due to a 10-place grid penalty imposed for a collision with Toro Rosso's Jean-Eric Vergne in Singapore.
Force India's Nico Hulkenberg suffered a five-place demotion to 15th place due to an unscheduled gearbox change following a crash in final practice.
Brazilian Bruno Senna - Ayrton's nephew - was furious after Vergne blocked him in the first part of qualifying, leaving his Williams in 17th place on the grid.
The Frenchman was later handed a three place penalty, lifting Senna to 16th, but it was little consolation for missing out on the second phase of qualifying and the chance to progress higher up the grid.
"He destroyed my lap. Now I have a long race tomorrow and hopefully with new tyres I'll get back into the points, but it's another one of those days," said Senna.