The Briton, who leads the championship by four points from Ferrari's Sebastian Vettel after four long-haul races, lapped the Circuit de Catalunya in one minute 18.259 seconds on the soft tyres.
Australian Ricciardo's car had some eye-catching aerodynamic upgrades for the start of the European season and ended 0.133 seconds slower after crashing in the morning, while Verstappen was third.
The two Red Bulls collided in Azerbaijan two weekends ago and are under close scrutiny by team bosses who could intervene if their rivalry risks overheating again in Sunday's race.
Vettel, who will be chasing his fourth successive pole position on Saturday, was fourth and Hamilton's team mate Valtteri Bottas fifth.
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Vettel's team mate Kimi Raikkonen suffered a power unit problem.
Bottas set the day's overall fastest lap in the opening session with a time of 1:18.148 seconds on the soft tyres, a remarkable 0.849 faster than Hamilton who won from pole in Spain last year.
Hamilton has not felt fully comfortable with his car and knows his championship advantage owes a lot to luck.
"The day was pretty good, but it was a tricky one because it was so windy out there," said the Briton, who was gifted a win in Baku two weeks ago when Bottas had a puncture in the closing laps while leading.
"Every driver was struggling with the changing direction of the wind. You're constantly arriving at each corner and the wind direction is never the same, so we saw lots of drivers going off.
"These conditions make it very difficult to define where the set-up needs to go."
LUCKY BOY
The virtual safety car was deployed in the morning when Ricciardo's car ran across the gravel and into the barriers.
"Thankfully, the damage is pretty light," team principal Christian Horner told Sky Sports television. "It was the old front wing so he's a lucky boy."
Home hero Fernando Alonso started the weekend a morale-boosting sixth, behind Raikkonen, with his McLaren displaying a heavily-revised three-pronged nose -- one of several conspicuous upgrades around the pit lane.
The Spaniard later slipped back to 12th.
Ferrari meanwhile caught the eye with wing mirrors mounted on the halo head protection device as an experiment.
Williams had another trying session as Polish reserve Robert Kubica took part in a race weekend for the first time since 2010, three months before he suffered serious injuries in a rally crash.
The former race winner was 19th, in 1:21.510, and faster than teenage Canadian team mate Lance Stroll, who was in last place on the timesheets with a best of 1:22.756 after his car went off into the gravel.
Kubica's car had a newer floor than Stroll's, however.
"Unbelievable how bad the balance is," Stroll complained over the radio.
Kubica was replacing Russian rookie Sergey Sirotkin, who returned for second practice and was slowest in 1:22.060.
(Reporting by Alan Baldwin, editing by Pritha Sarkar and Ian Chadband)
