Hamilton, starting from pole for the fifth time here, looks well set to clinch his fifth career victory at the Hungaroring on Sunday.
The British driver topped all three practice sessions and all three sections of qualifying to clock a best time of 1 minute, 22.020 seconds, putting him .575 ahead of Mercedes teammate Nico Rosberg and .719 clear of Ferrari's Sebastian Vettel.
"It's been a good weekend so far. I love the track, it feels like an old go-kart circuit we used to race on years ago," Hamilton said. "It's been one of the best weekends I've had. Can't remember having a better weekend so far than this."
In an encouraging performance for Red Bull, Australian driver Daniel Ricciardo, the winner here last year, sneaked into fourth place ahead of Ferrari's Kimi Raikkonen.
It was disappointing for Williams, with Valtteri Bottas sixth behind Finnish countryman Raikkonen and Felipe Massa eighth behind Red Bull's Daniil Kvyat.
Drivers wore tributes on their helmets and cars to Jules Bianchi, the French driver who died last week at the age of 25 from injuries sustained in a head-on crash at the Japanese Grand Prix last October.
A group of fans at the Hungaroring held up a banner in honor of Bianchi with "Tous Avec Jules" (All with Jules) written in French.
A minute's silence will be held before Sunday's race.
Rosberg was first out on track in qualifying, closely followed by Hamilton, who was nearly one second faster than Rosberg on their first laps.
Rosberg had complained about his car's balance during Friday's second practice, and the problem with understeering resurfaced in Q1.
"Just didn't find the pace, it's been a bit up and down all weekend for some unexplained reasons," Rosberg said. "Going to have a look at it tonight, definitely not happy with what happened today."
Two-time F1 champion Fernando Alonso sneaked into Q2 on his last lap but McLaren teammate Jenson Button just missed out, placing 16th.
Then, McLaren's persistent engine problems resurfaced as Alonso's car stopped suddenly early into Q2, forcing a red flag to come out and briefly halt the session.
Eager to get his car out of the way, Alonso quickly jumped out and started to push the car uphill on his own before a handful of track marshals helped him out.
Both Force India cars took part in qualifying, having been pulled from Friday's second practice session as a precautionary measure after Sergio Perez crashed because of a suspension problem. Both made it safely into Q2.
Chasing down Hamilton's leading time in Q3, Rosberg was fastest at the first time split and then drifted back.
As if underline his superiority, Hamilton then went out on one final lap and went even quicker to extend his leading margin.
In the final practice, Hamilton was .098 seconds ahead of Rosberg and .889 clear of Vettel, the only other driver apart from Hamilton and Rosberg to win this season.
"Third is the maximum we could do today, so we're very, very happy," Vettel said. "It was a great recovery from yesterday when we had problems with the car."
There was a late worry for Rosberg in P3 as his car slowed and then ground to a halt coming out of the pit lane because the car's anti-stall failed to engage. Rosberg climbed slowly out, removed his race helmet and stood for a few moments appearing confused before walking back to his garage.
He had even more reason to look glum-faced, given that he has never secured even a podium finish here.
The German driver, second to Hamilton in the F1 championship last year, secured pole at the last race here only to finish fourth behind Hamilton — who earned the first of his 17 race wins for Mercedes on this track in 2013.
Hamilton has won five races so far this year, with Rosberg clinching three.
The way he is racing here so far this weekend, Hamilton looks odds-on for a 39th career race win.
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Hamilton fastest in final Hungarian practice
