Ricciardo's best time of 1:18.455s was 0.183s quicker than Ferrari's Sebastian Vettel could manage, with Valtteri Bottas 0.018s further behind the German for the Mercedes team.
Kimi Raikkonen, Lewis Hamilton and Max Verstappen were the other drivers within a second of Ricciardo in fourth, fifth and sixth place respectively.
The rest of the top 10 was headed by Renault driver Nico Hulkenberg with Fernando Alonso a tenth further back in eighth for McLaren.
Carlos Sainz Jr and Stoffel Vandoorne rounded out the top 10 for Toro Rosso and McLaren.
Hamilton on top early on
As the 90 minute session got underway, it was Vettel who held the initial fastest lap, a 1:20.057s, which was just 0.028s quicker than team-mate Raikkonen could manage.
All the drivers were on the soft compoiund Pirelli tyre at this stage, and Bottas took P1 with a 1:19.591s, with Hamilton two tenths further back for Mercedes.
Hamilton and Ricciardo then began to trade fastest laps, with the British driver improving his time to a 1:19.373s, while the Red Bull was able to improve to a 1:19.324s, just 0.049s ahead.
The Mercedes driver then pumped in a 1:18.779s time to take first by over a half a second.
Super-soft runs interupted by red-flags
Raikkonen was the first driver to switch to the red marked super-soft tyres, and improved by around 1.2 seconds to vault into P2.
The Finn later stopped on track, complaining of no power and a throttle issue, but was quickly on his way.
Bottas, after making a mistake at Turns 2 and 3 on his first lap, improved to a 1:18.656s to fall just short of the benchmark by 0.018s.
Australian Ricciardo, whose Red Bull is running a big upgrade package this weekend, then came through to post a 1:18.455s time, which would ultimately prove to be the quickest time of the session.
After aborting his first lap, Hamilton was halted during his second attempt as Pascal Wehrlein lost the rear of the Sauber at Turn 11 and crashed heavily into the barrier.
A quick trip to the medical centre ruled he was ok, as the session was red-flagged to allow the marshals to retrieve the car.
When the session was restarted, drivers resumed their race pace simulation runs, before Jolyon Palmer brought out another red flag after having a similiar accident to Wehrlein, this time at Turn 14.
Magnussen gets some laps
After sitting out FP1 for Antonio Giovinazzi and missing most of FP2 after the Italian crashed, Kevin Magnussen was able to get some laps on the board, on the super-soft tyre and actually ended up quicker than Haas team-mate Romain Grosjean.
With tricky track conditions, Felipe Massa went for a couple of spins, and was 15th quickest, behind team-mate Lance Stroll.
Wehrlein received his second wooden spoon of the day, finishing 20th and last for Sauber, just a tenth behind team-mate Marcus Ericsson
|1st||Daniel Ricciardo||Red Bull||1:18.455s|
|6th||Max Verstappen||Red Bull||+0.496s|
|9th||Carlos Sainz Jr||Toro Rosso||+1.379s|
|11th||Esteban Ocon||Force India||+1.671s|
|12th||Sergio Perez||Force India||+1.811s|
|13th||Danill Kvyat||Toro Rosso||+2.122s|