After topping FP1 in the morning, Lewis Hamilton and team-mate Valtteri Bottas struggled to find a balance on the super-soft and ultra-softs, and ended up just eighth and tenth on the timing sheets.
Vettel set the new ultimate lap record in Monaco, the first driver ever to get under 73 seconds, with a 1:12.720 good enough to see him top the session, with Red Bull's Daniel Ricciardo second fastest, but 0.487s slower than the German.
Kimi Raikkonen made it a Ferrari 1-3, as Toro Rosso followed a good morning by impressing during the race simulation session, with Danill Kvyat and Carlos Sainz topping the session for long periods, before ending up fourth and fifth quickest.
The other drivers in the Top 10 were Max Verstappen (sixth), Sergio Perez (seventh) and Kevin Magnussen (ninth).
Toro Rosso on the pace
After the initial install laps, Kvyat was the early pace setter, lapping, on ultrasofts, in the 1:14 region. As the track began to rubber in more, he eventually lowered this to a 1:13.331, and for a while, the field tried, and failed, to match and beat the time from the Russian.
Evantually it was Ricciardo who pipped Kvyat by 0.051s, and then Raikkonen lapped just 0.003s slower than the Australian.
This remained the order until the Qualifying simulations were started, and Vettel went quickest of all with the 1:12.720 that was not to be bettered throughout.
After looking comfortable in FP1, Mercedes suffered a strange lack of pace, during race and qualifying simulations, with the W08 looking unsettled and hard to drive, with a 1-4 in the morning session replaced with an 8-10 in the afternoon.
Scruffy for the rest
For a majority of the rest of the field, it was a routine FP2, with drivers trying to bed themselves into the circuit, but there were some notable exceptions.
With just over 30 minutes remaining, Williams rookie Lance Stroll crashed at Massenet at brought his session to a early close, with him being nearly 0.5 down on team-mate Felipe Massa.
Jolyon Palmer had another disrupted session, an early engine problem forcing him to park up and walk back to the pits.
Sauber's Marcus Ericsson also had a moment exiting Casino Square,, clipping the inside kerb and whacking the outside barrier with the left-rear of the car.
In his final FP2, Jenson Button impressed, with a solid race pace and a fastest lap just 0.035s slower than McLaren team-mate Stoffel Vandoorne, with both cars being on the cusp of the top 10.
|2.||Daniel Ricciardo||Red Bull||+0.487|
|4.||Danill Kvyat||Toro Rosso||+0.611|
|5.||Carlos Sainz Jr||Toro Rosso||+0.680|
|6.||Max Verstappen||Red Bull||+0.766|
|7.||Sergio Perez||Force India||+1.079|
|15.||Esteban Ocon||Force India||+1.373|