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The Mercedes driver finished more than half a second ahead of teammate Valterri Bottas who came in second-fastest on the Melbourne circuit.
Hamilton's main rival for the Formula One drivers' championship, Sebastian Vettel, came in fifth. The German Ferrari driver finished 0.969 seconds behind the 32-year-old defending champion.
Red Bull's Max Verstappen came in third-fastest and Ferrari's Kimi Raikkonen was fourth.
Australian Red Bull driver Daniel Ricciardo was sixth-fastest at his home Grand Prix.
A second practice is scheduled for 4pm (0500 GMT). The race, the first of 21 in 2018, begins Sunday.
Hamilton's main rival for the Formula One drivers' championship, Sebastian Vettel, came in fifth. The German Ferrari driver finished 0.969 seconds behind the 32-year-old defending champion.
Red Bull's Max Verstappen came in third-fastest and Ferrari's Kimi Raikkonen was fourth.
Australian Red Bull driver Daniel Ricciardo was sixth-fastest at his home Grand Prix.
A second practice is scheduled for 4pm (0500 GMT). The race, the first of 21 in 2018, begins Sunday.
